Airline Trends OPINION
Value competition
Raymond Kollau, founder of airline
trends.com, reveals how hybrid low-cost carriers are targeting business travellers with no-frills chic premium cabins
Over the past two decades so-called value players – companies that offer good enough quality at low prices – have transformed the nature of competition worldwide.
Consumers Companies such as Walmart, ASDA, Aldi, IKEA, Dell, Samsung, H&M, Zara, Primark, IKEA, Southwest, Ryanair, easyJet and AirAsia have transformed consumer attitudes about trade- offs between price and quality. Or, as consultancy McKinsey puts it: “Companies offering the powerful combination of low prices and high quality have captured the hearts and wallets of consumers across the globe, raising the bar for all companies.” Two strengths underlie the
growing power of value players. The first is an impressive cost advantage combined with relentless execution. The second is a shift in consumer perceptions of the quality they offer. As value-driven companies
move from competing solely on
price to catching up on attributes such as service and convenience, many mainstream players rightly feel threatened, as they face steep cost disadvantages and lack the product and service superiority that once set them apart from low-priced competitors. Furthermore, household goods
retailers such as Target and Muji, hotel brands such as Indigo, Aloft, Moxy (a partnership between Marriott and IKEA) and airlines including JetBlue, Virgin America, Porter, Virgin Australia and Starflyer not only offer value for money, but have also added a touch of design to the experience. Coined 'no-frills chic' by
trendwatching.com, this proposition can be defined as low-cost goods and services that add design, third-party
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"Low prices and high quality have captured the hearts and wallets of consumers across the globe"
high-quality elements (think H&M’s collaboration with haute couture fashion designers) and/or exceptional customer service, to create top quality experiences at bottom prices. Says
trendwatching.com founder Reinier Evers: “No-frills chic is about the next evolution in a WalMartised world and is where the low-cost revolution meets the powerful force of product and experience design.”
Airline industry Focusing on innovation and enhanced experiences on top of the traditional low-cost model, 'no-frills chic' airlines such as Jetblue and Virgin America have created a loyal following. And the trend doesn’t contain itself to hybrid LCCs on short-haul
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