Which of the following airlines does NOT employ a low-cost provider strategy? Mu

Question

Which of the following airlines does NOT employ a low-cost provider strategy?

Multiple Choice

Airline 1 offers low prices on short-distance flights and cuts down on meals during flights.

Airline 2 offers low prices on long-distance flights and has long service times for its planes between flights.

Airline 3 offers low prices on short-distance flights and improves flight carrier capacity through addition of seats by reducing distance between existing seats.

Airline 4 offers low prices on short-distance flights and pays minimum wage rates to the flight crew.

Airline 5 offers low prices on long-distance flights and charges fees for carry-on as well as checked luggage.

Explanation / Answer

Low prices mean offering the products or services at lower cost but at the same time the services should not be compromised. Airline 2 is offering poor services at lower prices. So it is not a low-cost provider strategy. Low cost providers reduce the cost by their excellence in service, economies of scale or with other strategy.

So the correct option is Airline 2 offers low prices on long-distance flights and has long service times for its planes between flights.

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