A Short Introduction to the Passenger Airline Business - Assignment Example

Managing Airline Operations From your research or background knowledge, write a short introduction to the passenger airline business. Who is the customer and what are the principal inputs and outputs? Passenger airline business entails air transportation of passengers using aircrafts. The type of transport can be regional, local, international, and intercontinental depending on the airline flight schedules. In the airline industry, there are two main types of flights, the passenger flights, and the cargo flights1. The passenger flights transports passengers to and from various destinations, the cargo aircrafts also transports cargo to various destinations across the globe. While onboard the aircraft, the customers enjoy the services offered onboard the aircraft, such include drinks and meals in cases of long flights. In return, the customers pay ticket fares, which are often inclusive of all the services rendered onboard. On the side of the customer, the principal inputs include the fare paid to the airline as well as customer references of their cohorts. Principal outputs mainly dwell on the airline obligation to offer quality services onboard and ensure passengers arrive to their destinations safely. What are the two company’s competitive priorities? The two companies, easy jet company, and the Singapore airlines are both operating on competitive priorities to enable them fit efficiently in the market. The EasyJet Company has focused on low cost air flights. In fact, they were regarded as the cheapest European airline. The low cost priority has enabled them to compete favorably against giant players in the same field. Also in their competitive priorities, the company has chosen to use identifiable marketing and operational techniques. Such techniques include the use of one type of aircrafts, rapid turnaround time, no in flight meals, and provision of cost conscious customer care services. These competitive priorities have enabled the EasyJet companies to operate in the market and effectively achieve their desired revenues. Consequently, the company was able to reach its breakeven point fast since the business environment favored their market existence (Heracleous & Wirtz, 2008). Singapore airlines as well are utilizing competitive priorities to operate well in the market. Some of the competitive priorities of this company include being positioned as premium carrier that has engaged in high quality services as well as high level of innovation in their service delivery charter. The company is thus emphasizing on profitability rather than its size. In order to achieve these competitive strategies, the company has embarked on a number of internal organizational practices which enables it stay on top in the market competition and fight for the lion share of the market segment (Heracleous & Wirtz, 2008). Some of the organizational strategies include continuous development of people and maintaining a consistent service design. These practices have made the airline to be many people’s choice due to their quality services as well as consistency in service rendering2. As part of its strategy, the company has embarked on related diversification strategy to enable them compete and get equal chances in the market. Through the diversification strategy, the company has formed alliance with many other airline companies like India and china hence giving them a large market to operate on as well as establishing new potential markets. Comparison of the company’s annual reports In terms of annual report, the EasyJet Company has reported quite impressive progress terms of profit projections as well as market delivery. In terms of profit, the company registered an increase of £60 m to £248 m before tax, and this accounts for the profit got despite the £100 million fuel cost increase (EasyJet, 2011). The management has attributed the strong performance to effective cost control, establishment of strong networks, placing focus on customers as well as establishment of an effective yield management. In the same year, the company’s return on capital increased by 3.9% from the previous year figure bringing it to 12.7%. The company also registered an improvement in the on time performances. This went up by 13% making the figure to be 79% with key indicators being strong performance in the networks and customer satisfaction which improved by six percent. There was also an increase on the total revenue per seat, this increased by 4.1%. This shot up to £11.52 per seat after a decision by the management. The number of passengers using the company fleet also increased by 11.8% bringing the total figure to 54.5 million passengers. Consequently, load factor increased by 0.3 percent. The year also witnessed an increase in the number of passengers from the UK coming to 56% from the previous 53%. Overall, the number of passengers that used EasyJet Company increased significantly by 1 million. In regards to the performance of the Singapore International Airline in the year 2011, the company posted impressive figures in terms of revenues3. This was despite the economic turbulence that hit the market in that particular year. Thus in that year, the company registered $374 million net profit. The increase in fuel cost however left the company on its knees, posting a $ 38 million net loss. During the same year, the company registered an increase of 3.1% in the number of passengers. The revenue per passenger relatively increased by 3.6%, bringing the final figure to $87, 824. The passenger load factor however recorded a 1.1 decrease. Consequently, the company recorded an increase in passenger unit cost of 3.4%. Overall, the total number of passengers carried that increased by 9.7%. As well, the breakeven load factor increased by 2.5 points. The figures presented in the analysis of the annual performance of the two companies are got by comparing the previous performance that is 2010 with 2011. Figures on the companies’ financial statements were also used to analyze their performance in terms of improvements and reduction. However, overall, the EasyJet Company has posted an impressive return on investments despite the economic turbulence that existed in that year. How the companies presents themselves on the internet in advertising their services In terms of internet advertising, the companies own websites through which they reach their customers and reveal the nature of services they offer. According to the information posted on the companies’ websites, the two companies depict perceptions of quality differently. The EasyJet Company emphasizes majorly on low cost flights with improved turnaround time and efficient customer care services while onboard4. Thus for the EasyJet company, a combination of low cost factor with the in flight services depicts affordable and quality airline services. Singapore airline however dwells on quality services onboard. This is one of their major strengths in the industry; the customers are treated with excellent services onboard with the crew. As mentioned earlier, the company focuses majorly on profitability, a factor that largely contributes to overlooking of other things in the service industry. Perhaps this could be the main reason why the EasyJet Company is posting high improvements amidst the most disturbing economic times. In terms of quality, Singapore airline offer the best to their customers, however, many people may pledge their preferences for the EasyJet Company due to its affordability as well as the general in flight services offered onboard. Emotion map based on a recent encounter at the EasyJet Company Immediately after purchasing the ticket I went to the departure lounge Our flight is announced and we have to move in; The passenger preflight processing is quite slow; people spend long time on the queues during inspection. The airline cost is quiet impressive and passengers save a lot, however, the in flight customer service not good enough5. Customers only take juice, which does not satisfactorily quench the hunger, or the food craves onboard. Despite the company efforts to save lots of money and deliver quick turnaround, customer care onboard plays a major role. Customers need to be treated with quality meals that will increase their comfort and make their journey enjoyable. In addition, the meals presented onboard should be of great diversity. Travelers come from various backgrounds and cultures thus they need to have a diverse or wide range of meals to choose from while onboard. The online crews should be available to assist them make their selections. This is important since it defines the customers’ attitudes towards the aircraft. Similarly, the company needs to present customers with sufficient entertainment while onboard. Each passenger should be treated with his/ her own seat where they have all the entertainment gadgets around them. Most passengers prefer to sleep while travelling, there should be sufficient bedding onboard to enable them sleep comfortably. The aircraft seats ought to be adjustable to ensure that sleeping passengers or those with minors’ onboard travel comfortably without bothering others. The customer care service onboard also needs to be improved6. The in flight attendants need to be prompt and respond swiftly to customer needs. In most cases, they drag and their number seems to be disproportional to the number of passengers onboard hence making it uneasy to attend to all the passengers effectively. This can be quite annoying especially when you need a quick attention from the crews. The company should therefore bring more crews onboard to ensure quality and efficient customer care services. Offering the above services efficiently while onboard can largely influence customer perception about the company in flight services as well as customer experience7. This largely dictates their levels f loyalty to the company and the services rendered onboard. Therefore, as much as a company may need to ensure improvement in revenues, there is a need to ensure that they work handy with customer demands while onboard. In this way, the number of customers using their services will increase. References Belobaba, Peter, Odoni, A.medeo and Barnhart, Cynthia. The global airline industry. Chichester: John Wiley & Sons, 2009. Doganis, Ryan. The airline business. London: Routledge, 2006. EasyJet. Full annual Report 2011. Europe by easyJet, 1(1), 2011, p.1-108. Freiberg, Kevin and Gaia, Jackie. Nuts! Southwest Airlines Crazy Recipe for Business and Personal Success. Cengage Learning, 2008. Heracleous, Laura and Wirtz, Johnstone. Strategy and organization at Singapore Airlines: Achieving sustainable advantage through dual strategy. Journal of Air Transport Management, Vol. 1, no 3, 2008, p. 274- 279. Read More