Managing Airline Operations: Singapore Airlines and Essayjet - Case Study Example

 Managing Airline Operations Question 1 A passenger airline is known as the airlines dedicated to transport of the passengers. These passenger airlines generally operate a passenger aircraft’s fleet. The passenger airline industry has saturated enough due to the presence of several leading airlines. These leading airlines are implementing unique strategies in the business operation management in order to achieve potential competitive advantages. Now-a-days, people prefer quality in-flight customer service in economic price as the recent economic slowdown affected the purchasing power of people. Leading airlines around the globe are trying to reduce the business operation cost in order to implement competitive pricing strategy. Different airlines around the globe used to target different groups of target customers. Low cost airlines used to target price sensitive passengers. Premium and luxurious airlines used to target the people who are concerned about the quality of service and luxurious amenities within the airlines. The demand and needs of target customers generally differs from an individual to another due to different external and internal parameters. Airlines generally try to implement unique operation strategies in order to satisfy the needs of the passengers. These are known as the principal inputs. Safe and satisfied landing of the passengers to a desired destination is known as principal output. Question 2 The global airline industry can be characterized by several factors, such as commoditization of offerings, intense industry rivalry and overcapacity. In spite of all these mentioned characteristics, it is true that this particular industry is highly potential and maintaining a constant growth rate throughout the years. Singapore Airlines and easyJet are considered as two leading and profitable airlines. Singapore Airlines positioned themselves as a premium airline with excellent passenger service level and high innovation level. On the other hand, cost sensitive people are the major target customers. Singapore Airlines is one of the popular and most profitable airlines. This airline always tries to integrate innovation and excellence in the business operation process to attract premium passengers. It is true that global airline industry is becoming highly competitive. Therefore, it is important for the organizations within it to develop effective and unique business operation strategies in order to achieve potential competitive advantages. Singapore Airlines effectively integrated cost leadership and differentiation strategy in business process. The organization always ensures high service quality and innovation. In spite of all these aspects, the organization focuses on the business profit maximization. The organization does not want to become the largest airline, but they try to become most profitable airline. The management of the organization oriented its employees in the organizational culture. The employees and the mangers are also aware of cost-effectiveness and need for profit1. In addition to this, the organization used to pay rewards to its employees as bonus in order to keep them motivated to do effective performance. It is highly important for all the organizations to review the implemented strategies of the potential competitors. Singapore Airlines is the leader as well as the follower in the industry. The airline implemented advanced information technology in business process in order to ensure effective customer service. EasyJet is one of the leading low cost airlines around the globe. The airline has implemented cost leadership strategy in business process in order to attract the cost sensitive passengers. In addition to this, effective in-flight passenger service motivated the passengers to fly with easyJet. The airline introduced several short haul aircrafts in order to meet the marker demand of the Europeans. People in Europe used to travel frequently in nearby countries for several purposes. The airline followed the strategy of frequent airline services between short distances. The organization always targets a specific group of potential customers. The organization does not target business executives. The airlines targets rout specific customers. In addition to this, the organization does not rely on the travel agents2. The organization heavily depends upon the several external marketing channels to create brand awareness among the target customers. The operation strategies of the two airlines differ from each other. It is clear from above discussion that Singapore Airlines has positioned themselves as premium airlines. On the other hand, easyJet is known as one of the leading low cost airlines. Singapore Airlines give effectively value to the employees. On the other hand, easy Jet only focuses on business profitability. Singapore Airlines use to target business executives and people of high income group. On the other hand, easyJet Airlines target the cost conscious customers. Singapore Airlines integrate creativity and innovation in business operation process to reduce the business operation cost. On the other hand, easyJet Airlines try to reduce business operation cost by reducing the supply chain cost. Singapore Airlines used to achieve its strategic synergies through several related infrastructure and diversification. In addition to this, effective service design and development process helped the organization to reveal its strategies. On the other hand, easyJet is known as one of the leading low cost airlines. Effective marketing and public relation strategies through the help of external marketing channels help the organization to effective brand awareness among the target customers. Lack of access to the travel agents helped the organization to reduce business operation cost. This strategy helped the organization to maintain cost leadership strategy in the business process. Question 3 Revenue per ASK of easyJet airlines is 4.98 and total cost per ASK of easyJet is 4.62. On the other hand the cost per ASK of Singapore Airlines is 8.9 and Revenue per ASK of Singapore airlines is 1.15. The passenger load factor of easyJet is 62.5. On the other hand, the load factor of Singapore Airline is 78.5 3. Load factor is the number of total passengers as the percentage of total number of seats. Revenue per ASK (Available Seat Kilometre) can be calculated as the revenue divided by the total seats flown4. Cost per ASK can be calculated as revenue less the profit before tax and then divided by the available seat kilometres. It is clear from the mentioned figure that the easyJet is more profitable comparing to the Singapore airlines as the cost per available set kilometre is quite high for the Singapore Airlines. On the other hand, the revenue per ASK of Singapore is lesser comparing to the easyJet airlines. Therefore, it can be stated that the financial stability and business profit of easyJet airline is quite high comparing to the Singapore airlines. In terms of passenger load factor the capacity of Singapore airlines is quite high comparing to easyJet Airlines. Question 4 The global airline industry is highly competitive. The organizations within this industry are trying to implement effective promotional strategy in order to create significant brand awareness among the target customers. Singapore Airlines highly depends on online promotional and marketing communication activities. On the other hand, the easyJet airlines highly depend on traditional marketing activities. Singapore Airlines used to implement advanced technology in business process in order to enhance customer service and effective business performance. Creativity and innovation is the major business operation objective of this organization. The organization has strong online presence. Singapore airlines effectively adopt modern information technology to maintain effective relationship with the target customers. The organization developed most user friendly website so that they can provide effective information about new offers and services to the target customers. It is highly difficult for an organization to create huge brand awareness among the global people without having an effective and user friendly website. People can check schedules and buy tickets through the company website of the Singapore Airlines. It is true that the organization adopted and implemented two different business level strategies such as differentiation and cost leadership strategy. Implementation of effective online strategies helped the organization to reduce its business operation cost. Online strategy helped the organization to reduce the cost of travel agents as the travellers can easily buy tickets through the websites. EasyJet has limited online presence. It is true that this airline also have implemented unique promotional strategy. EasyJet implements cost leadership strategies in business processes in order to target the cost conscious passengers. EasyJet used to focus on two operation strategies, such as low price and on-time departure. The organization used to make limited promises, but most importantly tries to deliver on them. It is discussed earlier that the organization highly depends upon external marketing channels regarding advertising and promotional strategies. In addition to this, the organization used to promote different sporting events in order to create brand awareness. Limited online promotional activities are making it difficult for the organization to achieve more potential competitive advantages. Airline industry is considered as a service providing industry. It is important for the organizations within this industry to ensure effective customer service in order to gain customer loyalty. According to Singapore Airlines quality means innovation, creativity and excellence customer service. Singapore Airlines positioned themselves as premium airline. On the other hand, easyJet Airlines focuses on low turnaround time and low pricing of tickets. According to easyJet, quality means efficiency and speed in customer service. In addition to this, the organization believes that people always prefer efficient customer service in low prices. However, looking into the above aspects it can be stated that the Singapore Airlines used to offer higher quality. Question 5 It is clear from above discussion that the Singapore Airlines is positioned themselves as premium airline. On the other hand an easyJet airline is positioned as one of the leading low cost airlines. The organization faced two different customer service issues that affected the brand image of these two airlines. A flowchart and emotional map for passenger pre-flight processing has been drawn with respect to Singapore Airlines and easyJet Airlines based on a recent service encounter. Flowchart and Emotion Map for Singapore Airlines Emotion Map High Annoyed Displeasure Pleasure Low It is clear from the above mentioned flow chart and emotion map that the organization failed to fulfil the commitment about providing effective customer service to the premium customers. Flowchart and Emotion Map for Singapore Airlines Emotion Map High Displeasure Bored Pleasure Low It is clear from above flow chart and emotional mapping that easyJet failed to fulfil the commitment i.e. effective and low turnaround time. It is important for both the two airlines to ensure effective business operation and maintain its corporate and organizational culture. Singapore Airlines is known as one of the most dealing premium service offering airline. But, complaint about refusing compensation on damaged luggage can create huge difficulty for the airline to attract the target customers. The management of the organization needs to give effective training to the employees. In addition to this, the management of the organization should review each and every plan and policy. It will help them to monitor day-to-day activity and provide solution in case of any difficulty. It is important for easyJet to employee effective and experienced management team so that the organization can ensure effective custom err service. Effective turnaround timing and low cost tickets attract the busy and cost conscious passengers to fly with the easyJet. It is important for the organization to provide effective training to employees in order to maintain efficiency in the business process. These recommendation plans will help the organizations to provide more effective services to customers. References Essayjet. (2011). Europe by easyJet plc. [PDF]. Available at: . [Accessed on November 27, 2013]. Heracleous, L., and Wirtz, J., 2008. Strategy and Organization at Singapore Airlines: Achieving Sustainable advantage through dual strategy. Journal of Air Transport management, 15(1), pp.274-279. Singapore Air., (2011). Singapore Airlines Annual Report. [PDF]. Available at: . [Accessed on November 27, 2013]. Sull, D., 1999. Case Study: Easy Jet’s $500 Million Gamble. European management Journal, 17(1), pp.20-38. Read More