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Low Cost vs. Conventional Airlines

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Low Cost vs. Conventional Airlines

Level: Easy

Read the text about conventional and low-cost carriers and match the words in the left column with the words in the right column:

    1. Low-cost carriers seem to be seriously involved in the new trend in the US airline industry’s domestic market. Both, smaller no-frills carriers (e.g. Allegiant, Frontier and Virgin America) and bigger budget airlines (e.g. JetBlue and Southwest), have grown rapidly over the last decade and are now known to be controlling 30% of the domestic travel market as compared to legacy carriers. As more Americans are changing their habits and choosing discount airlines for domestic flights, conventional airlines are cutting flights, shrinking hubs and even abandoning some destinations. The recent economic downturn has only contributed to this reshuffling, taking a toll on traditional airlines.
    2. While low fairs are obviously appealing, they are no longer a major selling point. What does seem to attract passengers is the major shift in how air travel is perceived. Value is given to non-complex operations and a more positive attitude.

3. Shaw, a salesman from Maryland, comments on low-cost carriers: "Their people actually treat me like I'm important to them. And they can get me pretty much wherever I need to go domestically, and do it on time, safely and without complications almost every time."

4. Allegiant Air – an American budget airline – has shown growth in most turbulent times. Rated top performing among low-cost airlines by Aviation Week Magazine, Allegiant Air’s business is going very good – Travel President Andrew Levy says – citing Allegiant’s 30th consecutive profitable quarter, 7th in a row where they had at least a double-digit operating margin.

Left Column:

 

 

 

 

 

 

 

  1. top
  2. economic
  3. domestic
  4. grow
  5. take
  6. to cut
  7. shrink
  8. operating
  9. major
  10. selling
Right Column:

 

 

 

 

 

 

 

  1. downturn
  2. hubs
  3. (a) toll
  4. rapidly
  5. travel market
  6. flights
  7. point
  8. shift
  9. performing
  10. margin

Answers: 1i, 2a, 3e, 4d, 5c, 6f, 7b, 8j, 9h,10g

*Read more about budget airlines in an article by USA Today:

Article

2. Watch and listen to Andrew Levy talk about Allegiant:

Video

Review the active vocabulary used in the video and match the words with their definitions:

 

  1. top-performing (adj)
  2. (to) justify
  3. (the) downside of something.
  4. competitor
  5. to squeeze (in)
  6. profitable
  7. (to) duplicate
  8. tough
  9. route

10. carrier

11. balance sheet

12. revenue

13. exceptionally (adv.)

14. (to) unbundle

15. package vacation

 

  1. to demonstrate or prove to be just, right, or valid
  2. a disadvantageous aspect
  3. a rival
  4. to repeat
  5. a statement of a business or institution that lists the assets, debts, and owners' investment as of a specified date.
  6. to price separately
  7. demonstrating the highest level of success
  8. to force one’s way
  9. beneficial
  10. difficult
  11. airline
  12. a course of travel
  13. income
  14. extraordinarily
  15. a vacation organized so that it includes a number of services

 

 

Answers: 1g, 2a, 3b, 4c, 5h, 6i, 7d, 8j, 9l, 10k, 11e, 12m, 13n, 14f, 15o

 

Pick out the right definition for the following phrases:

 

  1. 1. to focus (on something)
  2. a) to concentrate on something, b) to try to do something, c) to resist something
  • to stand up to somebody.
  • a) to get up in front of somebody, b) to fight somebody, c) to be able to compete with somebody.

 

  • to expand something.
  • a) to promote growth, b) to become fat, c) to draw competition
  • to serve a niche
  • a) to cater for the needs of the poor, b) to offer services to a certain group; c) to serve in-flight meals
  • to fit into somebody’s sweet spot
  • a) to be perfect for somebody, b) to be sweet, c) to squeeze into a profitable business

Questions from the video:

 

 

  1. What does the reporter consider to be the downside of success?
  2. Who are Allegiant’s top competitors?
  3. What does Allegiant’s President consider to be the airline’s strongest points?
  4. What is Allegiant Air’s focus and why isn’t the company afraid of competitors?
  5. What unique service does Allegiant Air offer that other low-cost carriers don’t?
  6. What is the newest destination Allegiant is offering to travelers?
  7. Why has Allegiant chosen Hawaii as their new travel destination?
  8. When will they be up and running?

Answers:

1) (Competitors are looking to squeeze into the profitable business)

2) (AirTran, Alaska Air, Jetblue and Southwest)

3) (They maintain a very strong balance sheet, have exceptionally low costs and try to be creative on the revenue side of the equation by introducing practices before their competitors. For example, they unbundled the traditional airline product before everyone else)

4) (Allegiant try to focus on expanding their network in places where others don’t and serving a niche of small communities that don’t have good alternatives to travel to places they want to go to. They are confident they can stand up to their competitors)

5) (They offer a 3rd party service that sells package vacation products including hotels and car rentals)

6) (Hawaii)

7) (Hawaii is a terrific leisure destination, it is very popular and there is an opportunity to sell other products, such as hotels, attractions, etc)

8.) (Next summer)

4. Listen to the recording, rewinding or pausing where necessary, to fill in the blanks:

1. The last couple of years have been ……………….. for many airlines, but not so much for Allegiant. They have been growing and they were just rated the ………………………………………airline by Aviation Week Magazine.

2. I guess the downside of success is that now you’ve got other competitors that are looking at some of your routes, maybe looking to ……………………………on some of your profitable business. How do you fight them all?

3. I think when you have the type of financial performance we have been able to put up, others look out there and try to see if they could…………………..that. It’s very tough for other carriers to achieve the same kind of success in the …………………..that we operate in.

4. What we try to do is maintain a very strong………………………………., have exceptionally ……………………………….. and also – be very creative on the revenue side of equation.

5. There is a side of our business that is not yet duplicated by anybody – our 3rd party business, where we ……………………….a lot on selling…………………………..vacation products including hotels and cars.

Answers:

1) (tough, top-performing)

2) (squeeze in)

3) (duplicate, routes)

4) (balance sheet, low costs)

5) (focus, package)

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