The success of LCC business model in creating new demand for air transport contributes to the rapid growth of LCC. The increasing of market share of LCC, from 8% in 2001 to 25.5% in 2016 has affected revenue of FSC. In order to ensure sustainable development in this high competitive environment, FSC have provided more preferential price in airfare, while LCC provided more services, such as joining the airline alliance, providing VIP lounge, etc. However, these changes caused the boundary line of Business Model of FSC and LCC getting blurred. Thus, the purpose of this study is to investigate the perception of passengers towards Business Model of FSC and LCC.
Passenger survey data were collected at Taoyuan Airport and Taichung International Airport from January 13th to January 22nd, 2017 through random sampling method. The data were analyzed through SPSS20.0 statistical software tool, Descriptive Statistical Analysis and Importance-Performance Analysis. The results reveal that: 1. LCC has provided some free services, instead of only paid services; 2. FSC has transformed from providing full services to limited service in order to reduce the cost; 3. Both LCC and FSC have to emphasize in customer service and online booking service; 4. Ticketing is the core competitive element of LCC; 5. Services such as flight with hotel package, VIP lounge and other services with additional charged are not competitive advantages for LCC and FSC; 6. On-board meal, seat comfort and mileage accumulate plan are the core competitive advantages held by FSC. A few recommendations were made based on the outcomes of study which can help related parties to understand more about the differences between literatures and the actual perception of passengers, including: 1. LCC should concentrate in providing variety flight destinations and excellent customer service; 2. Frequent Flyer Program of LCC should be promoting and stressing in order to ensure its significance towards passengers; 3. In-flight entertainment facilities provided by FSC can be altered to optional paid add-on service.
