Business Models Of Airlines In The UK - Research Paper Example

Business Models Of Airlines In The UK Introduction The United Kingdom is one of the regions with low-cost airlines. Many people chose specific airlines because of the same reason: low cost. Many airlines operate an extensive network of international and domestic scheduled services and flights to numerous destinations in Europe, Western Asia, and North Africa (SAMBROOK 2010). Airlines such as Southwest Airlines, Ryanair and EasyJet adopt cost-cutting measures such as providing complimentary snacks on board or not selling connecting flights. Airlines have key points of business models such as quick turnaround times, high aircraft utilization, keeping costs of operations low, and charging for extras such as hold baggage, priority boarding and food (MARSHALL and COPUS 2011). Research aims/objectives 1. To identify which airlines people chose in UK to travel abroad 2. To determine the reasons people chose certain airlines in UK to travel abroad Research questions 1. Which airlines do people chose in the UK to travel abroad? 2. Why do people choose certain airlines in the UK to travel abroad? Literature review In order to keep low operation costs, UK airlines ensure that they maintain control of their employment strategy and minimize union involvement. Airlines have adopted more committed approaches with strategies in place to accommodate workers’ union. Airlines differ in several ways in efforts to attract more people. Some airlines such as EasyJet mainly fly to the primary airports in the cities for passengers’ convenience (MACKIE 2012). Others choose secondary airports to reduce costs further. Other ways of attracting passengers include offering convenient services such as speedy boarding, Flexi fare allowing changes for free to the flight within a window, and a checked in bag. In some cases, airlines do not allocate seats and passengers occupy available seats to pay for speedy boarding. However, all passengers are, since 2012, allocated seats prior to commencing boarding, because the previous non-allocation of seat slowed down boarding. However, some people tend to choose particular airlines because of various reasons. These reasons have been suggested to be related to consumer behavior and branding strategies (MARSHALL and COPUS 2011). Consumer Behavior Consumer behavior refers to the study of customers and processes that consumers use to select the goods and services to consume and to dispose. Many people make decisions concerning which airline to use every day. The possibility of being chosen as an airline depends on whether the airlines does the following: provide value services and customer satisfaction, enhanced airline value, effective customer targets, improved services, competitive advantage, broad knowledge base, understanding of customer perception of quality, and effective marketing strategies (MACKIE 2012). Airlines are often at the forefront of new technologies. In the past year, airlines have experimented with digital technologies such as Drones, Virtual Reality and Google Glass. Wi-Fi installations onboard aircrafts and at the airports create connectivity desired by passengers. Ease of connectivity is one of the reasons why some people choose certain airlines over others. Reflecting the digital technologies’ omnipresence in the passenger journey, a growing number of airlines align themselves with entrepreneurial, creative and technology industries in order to attract passengers. Some of the airlines participate in events such as SXSW and TED, immerse in digital culture by developing a Digital Media Lab, and create new apps through organizing hack-a-tons. All these efforts are directed towards attracting more passengers (MACKIE 2012). Branding Strategy Among the most essential business aspects in airlines are branding strategies. An effective strategy of branding guarantees major edge in highly competitive airline markets. Airline brands are their promises to the passengers. It tells the passengers what to expect from the services. Branding strategy differentiates airlines from one another. Airline brands are derived from what they are, what they want to be, and what passengers perceive them to be (DOUGHTY, HOPKINS and DORNACKER 2007). Airline brand strategy is how, where, what, when and to whom they plan on delivering and communicating their brand messages. Advert locations and distribution channels are part of the brand strategy. Strategic, consistent branding leads to a strong airline brand equity. This is the added value to airline services that allow them to charge more or less for their brand. This makes other airlines more competitive than others, and influences consumer choice (DOUGHTY, HOPKINS and DORNACKER 2007). Methodology Market research is usually needed to ensure that airlines produce what passengers really need and not what the airlines think the consumers need. There are two major marketing approaches in consumer behavior. Both secondary and primary research methods will be used. Secondary research entails the use of information that other researchers have already summed up together. Primary research, on the other hand, is that which is conducted first hand. These research methods will be used to collect information on how preferred airlines influence consumer behavior. Primary research will reduce the risk associated with new services (SAMBROOK 2010). Secondary research methods will be conducted on the existing sources about consumer behavior. These sources can include various publications and reports from airline authorities and commissions. There are many primary research tools available for market research on consumer behavior. For example, the research can utilize questionnaire, mail, observation, phone surveys, and focus groups. These methods will be used to sources information on reasons why consumers choose some airlines over others. Brand research is often needed to ensure that airlines produce what passengers expect to receive out of what they pay. The research will use both secondary and primary research methods to collect data among passengers and other airline authorities on what kind of brand best fits the increasingly competitive market. Secondary research methods will be conducted on the existing sources about branding strategy. These sources will include various publications and reports on branding strategy. The primary research tools that will be used include questionnaire, mail, observation, phone surveys, and focus groups. These methods will be used to sources information on the best branding strategy that makes passenger choose certain airlines over the others. Findings and analysis Airline marketing strategy is based on making flying affordable. They make efforts to cut out travel agents as a means to reduce flight costs. UK Airlines have used a number of slogans in efforts to impact consumer behavior. For example, EasyJet uses slogans such as “This is Generation EasyJet” and “Europe by EasyJet” (SAMBROOK 2010). These slogans influence consumer choice and preferences of certain airlines over the others. Passengers tend to choose airlines that are innovative maverick in the airline industry. Passengers need reliable and experienced airlines for travel reasons. Low-cost flights, high-value services, and high-quality products are some of the passenger criteria for selecting certain airlines over others. However, airlines cannot be everything that passengers need, hence, the presence of competition and competitive advantage in the airline market. Service package, websites, and promotional materials of airlines represent and communicate their brand (DOUGHTY, HOPKINS and DORNACKER 2007). The response by airlines to demands by customers for lower fares has been to lower seat costs. However, some airlines reduce flight costs and at the same time strip more of what the fare includes out of the prices. This is referred to as unbundled skies. It is a business model that is becoming very prevalent. Price-sensitive brands lower entry points so as to have passengers to commit, and then make use of upgrades to restore the margin. Some airlines require more pay from passengers with claims of adding more products and services to the fare price such as toilet. These influence consumer choice in some way (KEVIN DONE 2009). Some airline consultants have argued that there are numerous add-ons available when one flies, ranging from food and baggage fees to keeping the middle seat empty, and flight-delay insurance. These attract some passengers and discourage other, making them choose particular airline over the others. However, this kind of competitive model has consequences. As the product becomes less valued and valuable, service now comes at a price. This shifts the focus from what passengers get to what they do not receive within the fare they pay (KEVIN DONE 2009). Airline fees and charges amount to potentially complete economic rebalance of the airline service at the end of the market. Airfare is merely the admission price of getting on jet. Passengers who crave convenience, comfort, decent food and less stress pay more. While this may be a deterrence to some passengers, it is an attractive point to certain individuals, making them choose airlines that provide those services over those that do not (CZAPLEWSKI, FERGUSON and MILLIMAN 2001). Conclusion In overall, airlines have a low consumer satisfaction score compared to other service industries. Airlines that are on record for notable customer satisfaction in the United Kingdom are Southwest and JetBlue. These two airlines have achieved consumer satisfaction scores higher that other traditional carriers such as Delta, American and United Airlines, and US Airways. Southwest Airline is far better than JetBlue, and many people in the United Kingdom choose it over the others, however, both JetBlue and Southwest Airlines are meaningfully unique from the competition and their brands are poised for growth (CZAPLEWSKI, FERGUSON and MILLIMAN 2001). None of the legacy airlines are even close to matching the satisfaction and equity scores that are achieved by Southwest Airline. The Airline sets the trend for the industry and many people in the United Kingdom prefer it to the others. Bibliography Anonymous2000, Aug 31. UK Government: Air Canada/Canadian Airlines inquiry. M2 Presswire, 1. Anonymous2005, May 12. Discover the World Marketing Helps Copa Airlines Expand to Canada. 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