Department of Maritime and Logistics Management - Essay Example

? Department of Maritime and Logistics Management Table of Contents Introduction 3 Discussion 3 Answer 3 Answer 2 5 Conclusion 7 References 8 Introduction Global airline industry is highly competitive due to the presence of several leading airlines. Leading airlines are trying to understand the growing demand for the industry before expanding their business operation. Changing patterns of the demand of customers, economic slowdown of several countries, and increasing political and environmental challenges are forcing the global airlines to implement change strategies in order to maintain and secure their market share within the competitive industry. The industry has become saturated due to several negative external environmental impacts. Therefore, it is important for the new comers to understand the appropriate demand for the air service before developing a new business. Discussion This part of the essay will determine the key factors that need to understand before deciding the demand for a new airline business. Moreover, the study will identify the implications for the operation of an airline regarding the mixed passenger and freight model. Answer 1 It is important for a newly developed organization to do a market survey to understand several business factors. Knowledge about market competition will help the organization to develop an effective business plan. Moreover, the organization needs to review effective internal resources and capability of the organization. Defining Idea, gathering information about market competition, effective resources, customer demand and feasibility assessment will help the organization to move forward. Global airline industry has become highly saturated due to intense competition and several political and economical challenges. Recent financial crisis and global economic recession affected the global economic environment. Low purchasing power, limited disposable income of people and negative economic growth rate are the major consequences of this economic slowdown. People are trying to save more rather than consuming products and services due to this economic distress. Therefore, it is important for the organization to utilize the resources in such a way that can reduce the business operation cost. Effective operation cost reduction can help the organization to implement competitive pricing strategy. Effective competitive pricing strategy will help the organization to achieve potential competitive advantages. Airline industry is considered as the service industry. People always expect better service against their air ticket fare. Now-a-day, the global airlines are trying to implement CRM strategies in order to satisfy the needs of customer. Slowly and gradually, effective customer relationship management will help the organization to develop a potential target customer base (Winsveen, 2012, p.13). Therefore, the major objective of the organization would be providing effective in-flight customer service against low competitive ticket price. Employees are considered as the strongest asset in a service providing organization. Skilled and trained pilots, flight attainders and air hostesses are considered as the major competitive strength of an airline organization. Effective organizational and work place culture need to be adopted by the organization to develop an effective workforce. The organization should focus on employment benefits of the employees in order to increase the motivation level of the employees (Bowhill, 2008, p.333). Highly motivated employees will try to perform more effectively. Low turn around time and high frequency of flights increase the core competency of the airlines. The organization needs to provide effective training and development programme to increase the skills of the employees. Effective turnaround time management will enhance effective customer relationship management. Therefore, the organization needs to treat their employees and vendors as their own family members. Then only they can achieve effective competitive edge among several potential rivals. The organization needs to conduct a survey or market research throughout the industry in order to increase knowledge about demand. It is true that, airline industry cannot maintain effective performance throughout the years. The organization should understand that people love to tour in festival seasons to capitalize long vacation. It is known to all that airline business is very much seasonal business. Several organizations involve in the price war during this festive seasons. However, the newly developed organization should keep in mind that they need to implement low pricing strategy along with effective customer service in order to meet the market demand during the festive seasons (O’Connor, 2001, p.154). It would be critical if the organization cannot capitalize on these favourable business opportunities. The organization should try to introduce aircrafts for popular tourist spots within the country or outside of the country. Customers should get impresses by the in-flight service. These things will help the organization to meet with existing market demand. Answer 2 Mixed passenger and freight model is one of the unique cost cutting strategies that can help an airline to increase its business profit margin. It is important for the newly developed organization to develop effective plan in order to implement this passenger and freight model. Now-a-days, every passenger flights are carrying some freight along with all the passengers and their associated baggage (Shaw, 2012, p.39). It is true that the several commercial airlines make about 10% of their business revenue from the hauling flights. The newly developed organization should buy Boeing 747-400. This airplane considered as the largest passenger plan in the global market place. It can carry 5,330 cubic feet cargo along with 416 passengers. The cargo and freight section fits under the passenger compartment. There are three major categories of air freight, such as freight for cargo, freight for passengers and freight for both cargo and passenger. It is a unique strategy that can increase the revenue significantly. The organization should concentrate on the business operation to maintain successful business practices. Loading and unloading of cargo along with effective customer relationship management would be considered as the major growth driver in that case (Akiva, Meersman and Voorde, 2013, p.329). Moreover, the organization should try to maintain low turnaround time in order to maintain effective frequency level. The organization requires skilled and well trained employees for this business operation model. Effective time management can be major concern of the operation. It can be recommended that, the organization should provide effective orientation, and training and development programmes to the new employees. They need to ensure effective time management (Halpern and Graham, 2013, p.46). Otherwise, the newly developed airline can lose both effective business clients and potential customer base. The organization need to introduce the concept of cargo group that will take care of the cargo part. On the other hand, the organization should for a new group in order to load and unload the baggage of the passengers. Integration of both these process can create several chaos that can affect the business performance of the organization. Moreover, the organization should try to find effective agent6s and suppliers (Treasury, 2011, p.4). Numerous suppliers and agents are available in global market place. The organization needs to find out the cost effective one. It will help the organization to maintain business operation cost. These strategies will help the organization to implement passenger and freight model. Conclusion Global airline industry has become highly competitive. Several economical and political issues are creating huge business challenges for the global airline industry. The new organizations need to determine the key factors before entering in the competitive market place. The organization should consider internal capabilities and external threats and opportunities before understanding the market demand. They need to review their internal resources and external factors. Airline industry is the service providing industry. Therefore, they need to focus on effective customer service and low pricing strategy due to several economic challenges. The organization can integrate freight and passenger business model to increase business revenue. Effective time management, low turnaround time, and trained and skilled staffs will help the newly developed organization to develop and secure effective client and customer base. References Akiva, M., Meersman, H., and Voorde, E., 2013. Freight Transport Modelling. London: Emerald. Bowhill, B., 2008. Business Planning and Control. New Jersey: John Wiley & Sons. Halpern, N., and Graham, A., 2013. Airport Marketing. London: Routledge. O’Connor, W., 2001. An Introduction to Airline Economics. London: Greenwood Publishing. Shaw, S., 2012. Airline Marketing and Management. London: Ashgate Publishing. Treasury, H., 2011. Reform of Air Passenger Duty. London: TSO. Wensveen, J., 2012. Air Transportation. London: Ashgate Publishing. Read More