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Quantitative Analysis - Essay Example

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In the light of increased competition and rise of low fare airlines and discount rates in air charges it is wise to make structural changes that are capable of aligning the cost and revenue structure appropriately. The motto of the change should be the low cost and more revenue with increased efficiency.
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Quantitative Analysis

Download file to see previous pages... Re designing the operations to increase capacity continuing the same number of aircraft can be considered as primary issue. This can increase efficiency and as a consequence reduces congestion in securing seats in piedmont airlines flights. 1
Re modeling and re deploying aircrafts to increase hub operations where there is demand. For example 25% of the passengers traveling in Piedmont flight from charlotte to Boston are paying for another airline to have a connecting flight. If the company is able to introduce the connecting flight it can decrease the loss of market and can save time and charges by issuing tickets from charlotte to the passenger's required destination in charlotte itself.
A detailed structure and decision making process should be developed to decide the number of seats that must be allotted by offering discount and the number that can be allowed in full fare. The seats that are allowed on discount must be open to both stimulators and diverters and no diverter (the person paying full fare must not be dissatisfied due to the reason that a discount seat was allotted to a stimulator after he was rejected on the cause of non availability.
By increasing the number of seats in each aircraft, that is by remodeli...
The decision must be applied both aircraft interiors and mainline operations.
The decisions that are to be taken can be as follows
(in millions) 2005 2006
Incremental profit improvement initiatives $ 400 $800
Non Pilot pay and benefit savings $250 250
De hubbing of selected flight operations $55 $70
Continuous hub redesign $50 $150
Total non pilot operational improvements $755 $1270

The above table is adopted from following website:
The firm can get benefits by converting banked flights to continuous ones. The other benefits the firm can consider were the concessions from aircraft leassors, creditors and vendors.
It can be suggested to introduce more simplified fare structure all over the country and if possible for the flights operating overseas.
These simplified fares must be able to meet the needs of all types of customers. They must simplify the way of doing business and must result in cost effectiveness. The implementation of fare cap also can be suggested along with the limitation in allotting the number of seats to H category (the discount category).
It should be taken care that the introduction of simpli fares should not affect the revenue inputs negatively.
So the implementation must in a step by step process. First the traffic must be stimulated and then the fare structure must be revised. But the both things must be planned with coordination by announcing the decision of fare simplification before the firm starts the stimulating the traffic. The announcement of the simplified fare structure must help in stimulating traffic.
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