1) Economies of scope
Economies of scope are economic factors that make simultaneous manufacturing or providing of more than one service at a particular time. Spicejet is used for transportation of passengers, goods and animals. Thus, providing transportation to different sectors.
2) Oligopoly
In airways a few firms dominate and is highly concentrated. Spicejet dominates the Indian airways. It maintains its dominance by high cost, therefore, cost of entry is very high.
3) Vendor locking
Spicejet operates for different stretches. Some flights for domestic and some for international destinations are used. Different distances require different planes. When a plane is bought, its switching cost is very high. Thus, planes are ordered with high purpose considerations.
4) Income elasticity of demand
Airlines are most expensive means of transportation in India. Thus, as the income of people increases, they tend to travel more by airways as they can afford it.
5) Marginal utility
Spicejet offers premium offers under the name SpiceMax, under which passengers can obtain additional benefits like pre-assigned seats with extra leg room, complimentary meals, priority bag handling, etc. Thus providing extra satisfaction to its customers.
Economies of scope are economic factors that make simultaneous manufacturing or providing of more than one service at a particular time. Spicejet is used for transportation of passengers, goods and animals. Thus, providing transportation to different sectors.
2) Oligopoly
In airways a few firms dominate and is highly concentrated. Spicejet dominates the Indian airways. It maintains its dominance by high cost, therefore, cost of entry is very high.
3) Vendor locking
Spicejet operates for different stretches. Some flights for domestic and some for international destinations are used. Different distances require different planes. When a plane is bought, its switching cost is very high. Thus, planes are ordered with high purpose considerations.
4) Income elasticity of demand
Airlines are most expensive means of transportation in India. Thus, as the income of people increases, they tend to travel more by airways as they can afford it.
5) Marginal utility
Spicejet offers premium offers under the name SpiceMax, under which passengers can obtain additional benefits like pre-assigned seats with extra leg room, complimentary meals, priority bag handling, etc. Thus providing extra satisfaction to its customers.
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