The stars of low-cost impose their law
March 30, 2010
Finally, Air France has renounced its launch low-cost subsidiary Transavia on the lucrative domestic route Paris-Nice, after several months of reflection. Competition from easyJet, Ryanair to trial with the national company sought the response to the inevitable breakthrough of low costs on its medium-haul routes.
It's not just in the air that this phenomenon undermines many businesses forced to cope with this new situation. "The low-cost impact throughout the economy. It is a force of competition that scares others. Even if you do not travel in low cost, it affects the economic equilibrium of Air France, "said Emmanuel Combe, professor of economics at Paris-I. He said this trend is a factor beneficial rebalancing of competition for the consumer.This is the promulgation of the "fair value" of a product or service, as opposed to "broken promises" of companies who have abused pricing and margins.
Internet telephony, banking, insurance, food, tourism, information technology, optics, flowers, health, automotive, gyms … the low-cost emerging everywhere. The Dacia Logan is one of the most profitable vehicles from Renault. As for the crisis, it became the dominant economic model. "Even if the hard discount food has lost ground last year because the traditional retailers have stepped up their side of the first price and discount," said Emmanuel Combe.
France still modest compared to our neighboring German or British, the low-cost model is gaining ground fast. It threatens mostly mid-range without any real value.Conversely, it made the bed of companies who can make a difference obvious competitors at low Chinese prices (like Huawei) have not threatened the break the iPhone. Taking rather easyJet Air France for a European trip because there is not much difference on a one-hour flight, we will not sacrifice however on arrival the hotel of charm or luxury where you will stay. Faced with online banking, institutions that will benefit their game well are those who offer services or advice upscale.
For some, this "mode" is not only positive effects. "Companies have realized that it was talk of selling low-cost.Now it is a statement which is misleading to believe that buying "smart", then it's a spiral that destroys wealth, employment, innovation and the world, "denounced Bruno Fay , with Stephane Reynaud, author of the book No Low Cost (Editions du Moment), released last fall. For them, the bill is low-cost long: inferior products, oppressed workers, lack of after-sales service, relocation or, like Ryanair, moving the price of airline tickets on the taxpayer.
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