TABLE OF CONTENTS Chapter 1 Introduction:.......................................................................................................1 Aim.......................................................................................................................1 Objectives............................................................................................................1 Methodology of Study:.......................................................................................2 Chapter 2 Expected Result...................................................................................................3 Research questioners..........................................................................................

4 Chapter 3 Literature Review...............................................................................................6

INTRODUCTION The airlines offering low fares and fewer comforts are said to be as low-cost airline carrier or the airlines which are without frills, provide discounts and are budget efficient. They may charge extra for providing meals, special seating allocation, assistance in baggage and boarding as per the priority etc. Prices of their tickets are fixed and are non-redeemable if the customer has cancelled his/her ticket or did not show up.

These airlines usually take off and land on the secondary airports. They generally uses chartered or flights as per schedule to provide bargainbasement fares. They often fly in early dawn or late at night in order to avoid air traffic, flight delays and take the advantage of lower landing fees. There is a very huge market for these low cost carriers. The demand is sky high, but the airlines supplying this are very less in number as compared to the demand. For the purpose of growth, they use certain very successful measures like they have a single class for passengers and generally use small, new, fuel economic airplanes( mostly the airbus A320 or Boeing 737 crafts. For further reduction of their cost of maintenance and acquisition, they use minimum required equipments on airplanes. In Europe only ,there are 40 carriers which provide low cost services. Among these , RyanAir from England and Air Berlin from Germany have the most wide coverage and strongest customer base.both of these earn a hefty amount of revenues irrespective of being low cost airlines.as customer id the the kingpin today, these low cost carriers, cater to the needs of their clients and thus are successfully running and managed.

AIM The aim of the project is to study the scope of low cost airline in Europe and detailed comparative study and customer preferences analysis between Ryan Air and Air Berlin in low cost carriers segment in Europe

OBJECTIVES Operating a low cost airline is very difficult, especially in the face of rising prices of fuel. The demand may have increased, but so has inflation.Hence, the objective of the research is to define the factors that affect an airline travel expense, and the ongoing operatives behind the price margin maintained by low cost airlines.

a. Problems faced by low cost airlines with respect to inflation, rising demand and limited services, increasing taxes and times of recession b. Customer perception and preferences c. Quality concerns and standards d. Competition to luxury airlines e. Measures followed by carriers to satisfy their customer base METHODOLOGY OF STUDY For a research to be complete in all aspects, the study of the primary and secondary research is essential. The information gathered from a questionnaire and the various interviews conducted have been used as the guiding path towards the analysis of the low cost airline industry. Further, to the objective of the research, two airlines _____________ have been compared on the grounds of services, price, quality standard, brand value, and customer loyalty. Primary Research Questionnaire: A questionnaire of 15 questions was prepared and given to random group of people to respond to. Interview: The questionnaire was used as the basis for the interview of the group to analyze the perception and level of trust enjoyed by the two companies, and conclusion to the better of the two airlines was drawn.

Secondary Research Internet sources were utilised to research about the price reduction strategies of the two airlines, and the comparison was done based on the outcome of these strategies. Online queries were followed to bring out the newer trends in the companies policy towards customer orientation and service delivery. The data thus collected was analyzed and the results were discussed. The preferred has been highlighted and the differences have been discussed. Also, the recommendations have been provided for both the airlines based on the expected scope of low cost airline industry. CHAPTER 2

EXPECTED RESULT The questionnaire and the interview covered key differentiating features between the two airlines. The expected result would be that as the people would perceive low cost airline as the preferred mode of travel, their main concern now would be more on quality service and timely delivery of the promised services.

QUESTIONNAIRE Research has been done on the grounds of sample population- who have used low cost airlines at least once Size of sample:-45 persons Q1. How often you travel by air? 1. Once in a week 2. Once in a month 3. Once in half yearly 4. Frequent traveller How often u travel by a low cost airline Q2. How did you find these low cost airlines as per comfort is concerned? 1. GOOD 2. EXCELLENT 3. WASTAGE OF MONEY 4. AVERAGE Q3. What are the factors which drive you to travel by low cost carriers? 1. ECONOMIC 2. TICKETS AVAILAIBILITY 3. Flexible timings 4. OTHER REASONS (DO SPECIFY)

Q4. Do you know the following airlines? 1. Air Berlin 2. RyanAir 3. British Airways 4. Easy jet Q5. Among these which one would you prefer the most? 1. 2. 3. 4. Air Berlin RyanAir British Airways Easy jet

Q6. How would you rate your preferred low cost airlines as per services, price, quality standard, brand value, and customer loyalty? 1. EXCELLENT 2. GOOD 3. WORST EXPERIENCE 4. AVERAGE Q7. Is their any other low cost airline you regularly use? 1. No 2. Yes (Please ______________________________________________

specify)

Q8. What are your views regarding low cost/ no frill airlines? 1. I think they run on brilliant ideas. 2. I am not influenced on their difference with other airlines 3. Airports used by them are very inconvenient to reach at, than big airports 4. I have no problem on inclusion of meal in a short distance flight 5. Travelling by other then these airlines is a waste of money Q9. Would you travel these low cost airlines again? 1. Yes

2. No 3. Not sure 4. Depends on circumstances Q10. How you get your airline tickets? 1. Travel agents 2. Airline office 3. Internet 4. Other (please ________________________________________________ Q12. Rate service quality of low cost airlines. 1. Poor 2. Satisfactory 3. Okay 4. Good 5. Very good Q13 . Rate the prices of low cost airlines 1. Poor 2. Satisfactory 3. Okay 4. Good 5. Very good Q14. Rate safety features of low cost airlines 1. Poor 2. Satisfactory 3. Okay 4. Good 5. Very good Q15. Any other comment you would like to give on these low cost airlines? ..................................................................................................................................... ..................................................................................................................................... ..................................................................................................................................... ..................................................................................................................................... .................................................................................

specify)

CHAPTER 3 LITERATURE REVIEW Low cost airlines have a single class for passengers. They generally use small, new, fuel economic airplanes (mostly the airbus A320 or Boeing 737 crafts), which help them in reducing their training and servicing costs. They develop more than one hub to attain maximum coverage to its destination and cover their market. For further reduction of their cost of maintenance and acquisition, they use minimum required equipments on airplanes. In the present world one cannot imagine without travelling thus low cost carriers grew and became most popular means of air travel as inflation is there and recession leads to low incomes thus people tend to travel with low cost airlines . These airlines have revolutionized the present era of travelling from one place to another via air. People get attracted towards these low cost airlines because they save lot of money by travelling in these airlines rather than the premium airlines.100 to 250 EUROS difference is there between the low cost carriers and other companies, which is a lot for middle class client who also have desires to travel by air. Security in these airlines is at par with the other airlines companies as both have the new technology safety measures, but the only difference is some low cost airlines dont have new and modern airplanes as compared to others, still it does not make huge amount of safety concern on board. The competence and quality of pilots, crew staff on these airlines is of same standard as of the other premium airline companies. These low cost airlines have some disadvantages as well, due to which some people dont prefer travelling via these low cost airlines. One snag is that scheduling of there flights is very ill-timed, this is the reason some people dont prefer travelling via low cost airlines. For E.g. the majority of low cost airline carriers carry out their flights in early dawn or late at night in order to avoid air traffic, flight delays and take the advantage of lower landing fees. But still these airlines have a great hand in revolutionizing the whole scenario of travelling by air. The fathers of these low cost airlines are Pacific Southwest Airlines and Southwest Airlines from USA. These low cost air carriers are successful because of an additional demand in air travel and when the customer is getting a ticket of half the price of what they would have paid for other premium airlines and are travelling by air only and are reaching the place they want to ,then who wont be travelling with these low cost airlines. Generally in small travel time customers basic response is who needs food or other facilities which are available in other airlines, thus they tend to travel through these low cost airline carriage

Due to these low cost airlines competition in the aviation industry have increased on a very large scale and new and cheap air lines are coming into context and thus making air travel more cheap and customers are taking benefit of it by travelling at a very low cost as compared to other airlines. These airlines have led to an increase in number of local or civil airports as these airlines tend to land and takeoff from these secondary airports as cost of airports is less in these secondary airports. One of the major concerns about low cost airlines is that they are increasing day to day damage to enviournment as they are travelling in large amount these days. As Europe is one of the biggest air travel market in the world therefore low cost carriers are also in large amount in Europe. Europe records 6% increase in seating capacity and frequencies too thus incurring 1% flat growth in frequency of flights on day to day bases and 4% increase in intra Europe travel only. Thus this shows how much impact these low cost airlines have made upon the people of Europe. Thus this is indulging in increase of civil airports. These low cost airlines employed around 350000 people in 2009 and 2010.they vastly concentrated on three European countries only namely UK, France and Germany. These airlines turnaround time is very less as compared to other general airlines i.e. they allow the maximum usage of there airplane. There unreserved seating encourages the passengers to board quickly and easily thus decreasing turnaround time. Low cost airlines emphasize on direct sale of there tickets to cut travel agents fees. The two airlines taken here Air Berlin and Ryan Air both comes under the low cost air carriers and both these airlines functions in Europe and are one of the cheapest air lines in Europe ,Ryan air is from the U.K while Air Berlin is a German based airline,. both these airlines use different tactics to work and are earning profits consistently and are giving very good competition to other low cost air carriers, Air Berlin is ranked no. 1 in Europe in low cost air carriers category and Ryan is ranked no.3 in the same category Both are really concerned regarding keeping their standards intact. In this time of client satisfaction, both these airlines are very cost effective and as far as comfort and safety of passengers are concerned, one can rely on these airlines. Air Berlin and Ryan Air both have used the economic factors (inflation and recession) to its full potential by lowering down the rates of their flights as people cant stop travelling and when they will be getting flights on lower rates as compared to other premium airlines flights, basically these airlines use economies of scale for their operations.

METHODOLOGY

My research is about the--------- low cost carriers in the European market and its impact on the people of Europe. With the use of secondary data I have made this report. Internet sources were utilised to research about the price reduction strategies of the two airlines, and the comparison was done based on the outcome of these strategies. Online queries were followed to bring out the newer trends in the companys policy towards customer orientation and service delivery. The data thus collected was analyzed and the results were discussed. The preferred has been highlighted and the differences have been discussed. Also, the recommendations have been provided for both the airlines based on the expected scope of low cost airline industry.futher i have interviewed to collect the primary data.. A questionnaire of 10 questions was prepared and given to random group of people to respond to and then the questionnaire was used as the basis for the interview of the group to analyze the perception and level of trust enjoyed by the two companies, and conclusion to the better of the two airlines was drawn. Airberlin A German based low cost airline which came into existence in the year 1978 is just the 2nd largest airline in Germany after Lufthansa. In terms of passengers it is the 6th largest airline in whole Europe. It has a huge fleet size of 151 planes which fly to 163 destinations in countries. Its main areas of operations include mainly holiday destinations of Mediterranean region, north Africa, the canary islands and southeast Asia along with the Caribbean and northern and southern America. In year 2010 it carried around 33.6 million passengers. It caters the need of both business and holiday clients.The main attraction of air Berlin is its perfect services which are offered at competitive prices. In highly competitive sector of aviation they are setting up high standards for other low cost carriers. Apart from this it focuses on environment sustainability also, getting modern jets certify a reduction in injurious emissions in environment and also the fuel consumption to them in this world of ever increasing fuel prices. RyanAir RyanAir is an Irish based low cost airline started in 1985 with the initial investment of just 1 and workforce of 25 people. With a fleet size of over aircrafts flying away to 65 destinations across Europe and morocco, this carrier has its headquarters at Dublin airport, Ireland. In terms of destinations where it provides its services, united kingdom is its biggest market, closely followed by spain , Germany, France and Italy. It carries approximately 73.5 million passengers every year. It is termed as Europes largest low fare carrier and worlds favourite airline (they quote this themselves).

Starting from a bare minimum of 9.99 flights, this airline has been characterised on the basis of rapid expansion which was due to deregulation of aviation industry in Europe in 1997 and its successful low cost business model. From business as well as environmental point of view , they claim that they stand 1st in terms of load factor and seating density. CHAPTER-4 RESULT AND FINDINGS 4.1 SWOT It is the conclusion of external as well as internal analysis or research, moreover one can define SWOT analysis as the companies present strengths,weakness,opportunity and threat.
1.2

ANALYSIS ON AIR BERLIN Strengths:

First charter air carrier that became a low cost contestant Proactive and innovative leadership Winner of various service awards On board service gives basic comfort to its customers Process of booking tickets id very simple

WEAKNESSS:Mergers and acquisitions have complicated the decision making process. Promotion seems to be very low for Air Berlin Innovation is not continous Seat occupancy ratio is very less

OPPURTUNITIES

Oppurtunity to expand in asia and Africa Acquisition of LTU have opened its gate to to expand to north America

Horizontal and vertical integration would be offsetting the competition in market. Extra flight schedule to grow

THEART

Competition in market will lead to increasing operating cost Competition related with fair with other competitors ANALYSIS ON RYAN AIR STRENGHTS:

Low fares Excellent customer service Frequent scheduling of flights Operating cost is very low

Weakness:

Promotion is very poor Seat allotment is very poor

OPPURTUNITY

Growth in EU More reduction in operating cost through ancillary services Internet advantage in terms of booking of tickets

THREAT

_____________ ____________ _____________ ________________ Results and Findings

The data thus collected from both secondary have given out the figures about how the two airlines are operating and how the customers perceive these two low cost airlines in terms of quality and customer service. The questionnaire consisting of 10 questions was given out to 100 frequent travellers who had travelled by both the airline at least once. These passengers had experienced the low cost flights in general and had taken the services of both Ryan Air and Air Berlin at least once. The results of my findings were that the main factors that attracted the passengers towards these airlines were the cost factor and availability. Due to the recent recession and the rising inflation, the spending power of the consumer has reduced considerably. This has affected the lifestyle of the people, and those who preferred luxury airlines have also begun shifting to the low cost ones. This has come as a positive outcome for the LCC segment, which have increased the services to various selected and random destinations across the world. Europe has been the hub for these airlines, and there is stiff competition between the luxury airlines and the low cost ones. Ryan Air has an edge on upon Air Berlin. The information received from reviews and earlier studies show that the passengers prefer quality over everything else. However, the recent trend shows a little more focus on price as well. Air Berlin . In the month of July 2011, Air Berlin boarded 3,809,401 clients which is2.9 % more than last years number of 3,700,971 passengers. The utilisation of fleet capacity in July rose by 3.3 % points which means from 81.2 % shifted to 84.5 %. However the load factor of the company got reduced by 1.1 percent as compared to July 2010. On the other hand, Ryan Air boarded approximately 7,610,000 clients which is6.17 % more than last years number of 8,080,000 passengers. The utilisation of fleet capacity in July rose by 5.4% points which means from 84.2 % shifted to 89.6%. However the load factor of the company got increased by 1.1 percent as compared to July 2010 i.e from 88% to 89%. The customers at air berlin enjoy free snacks and drinks in flight for on air consumption along with newspaper and magazines. On all flights of more than an hour flight time, complimentary full hot meals are served. Where as in Ryan air offers these services at a nominal price, which is little more than AirBerlin but of a higher quality than Air berlin . CHAPTER 5 CONCLUSION