From the price mechanism of low-cost airlines to the intense promotion process, low-cost airlines overcome cost reductions towards ticket prices that influence customer intention to fly with this airline business model. Hence, low-cost airlines firmly intend to use ancillary products and services that approach passengers, including seat selection, baggage service, priority pass, food and beverage, and in-flight entertainment. Therefore, this paper focuses on the theoretical concept of ancillary products and services of low-cost airlines and the review of the passenger perspective regarding this value-added from people service based on marketing mix in this competitive market of low-cost airlines. This research aims to propose the marketing mix approach, which focuses on people that generate service value-added in ancillary.
TopIntroduction
The intense atmosphere of low-cost airlines worldwide after air transportation deregulation (Ushakov, 2014) brings the competitive challenge in ticket price as the priority of this business model. Southwest Airlines, EasyJet, Ryanair, AirAsia, and IndiGo are an example of strict competitive low-cost airlines in the world market. There is not only one low-cost airline in a country or even the region with the same operation route. Passengers are the ones who choose which low-cost airlines they want to fly with as well as the service or products that they offer to the passenger (Par et al., 2020). The rapid growth of low-cost airlines brings the value of service quality and product development as passengers focus on different emotional approaches during inflight activities (Odegaard and Wilson, 2016). According to Salas (2022), the growth of low-cost airlines around the globe is significantly increasing to 254.1 billion in market size.
Figure 1.
The prediction growth rate of the low-cost airline from 2020-2027 (Source: Salas (2022))
Airline ancillary has become a considerable approach for low-cost airlines. The previous study by Leon and Uddin (2017) found that interesting ancillary can influence passengers to purchase. Therefore, low-cost airlines need to examine the interesting ancillary items that can convince and better represent the airline to other airlines. In terms of the development and competitive challenge of ancillary objects in the low-cost airline, the marketing mix strategy is one of the practical approaches as a tactical marketing model. The compliance of marketing mix is voluntary to understand the concept of product and service approach as product, price, place, and promotion (4Ps) (Shaw, 2016). However, according to the service sector of the low-cost airline, the 7Ps of the marketing mix are focused (on the product, price, place, promotion, process, physical evidence, and people). Therefore, the marketing mix can enhance the development of airline ancillary and specifically focus on passengers needed and wanted in those items. Importantly, this study is to study the theoretical concept of low-cost airline ancillary and development ancillary with marketing mix marketing strategy for a competitive approach.
Also, people, in this case, means airline staffs are part of the “People” marketing mix that generates the vital role of offering products and services to passengers. As ancillary is sometimes called different products and services to some passengers, a good representative can overcome that situation and provide sales achievement. Theoretically, it is not only people working alone, but the whole part of the 7Ps is essential. However, for the success of service value-added in ancillary, people are the core. Additionally, in a competitive industry, human resources management must work with the marketing team in the marketing mix for the best result of revenue. In contrast, the development of ancillary value-added in the low-cost airline marketing mix, especially in people, is significant in substantial value-added.