7 Key Questions Low Cost Airline CEOs Must Answer to Grow Profitability

Michael O’Leary, Carolyn McCall and other CEOs of low cost airlines (and for that matter most hybrid and full service airlines) in Europe face an uphill battle.

Their challenge is one of how to grow profitability in a maturing and saturated market.

What does this mean?

Well, asking a number of the CEOs themselves reveals a number of critical questions – some old, some new. Namely:

•    How should traditional business models evolve to combat rising competition from network carriers?
•    How can airlines develop sound fuel strategies & crisis management for survival? To what extent will new aircrafts reduce the impact of fuel costs?
•    How can you maximising yield/seat – delivering premium services to demand premium fares?
•    How do you define clear distribution channels & service levels to capture the corporate market? And where should you stand on the ‘airline distribution’ debate – what offers higher ROI?

•    How can you capture new ancillary revenues?
•    What new alliances and interlining agreements can be brokered for increased profitability?
•    What does the rising trend of consolidation mean for your airline and for the wider aviation industry?

Answer these 7 questions well and I think you’ve got a winning formula. Ryanair comes to my mind…. Others, like Vueling and easyJet seem to also have addressed these issues well.

Can anyone cite an airline that has mastered them?