• Flying to smaller airports near the major European cities and using a point-to-point service model rather than the major airlines’ model of hub and spoke through major airports. Smaller airports have lower landing and usage fees, fewer time slot restrictions or congestion delays and enable faster turnaround times. As a result of this strategy, Ryanair targets the budget conscious leisure traveller rather than the business traveller. This strategy of Ryanair runs counter to Besanko’s theory on Economy of Scope where he cites the airline industry’s hub-and-spoke model as giving the airlines Economy of Density in having more passengers
These cost savings are achieved through a few fundamental principles that underlie the low cost airline model, these being high aircraft utilisation achieved through clever timetabling and fast turnarounds, high load factors, and ruthless cost control. The final part of the study evaluates whether, in my opinion, the low cost airline industry is sustainable in the UK and after careful consideration of
Executive Summary Outlined in this analysis is the underwriting process for Jetblue Airways IPO as well as a description of the steps taking, and lastly the valuations for this IPO based on financial and non-financial information. JetBlue Airways is an innovative and low-fare airline that promised to “bring humanity to air travel back in 1999. Their primary goal was provide high-quality customer service for passengers flying in unique and new aircrafts that had leather seating free Live TV in every seat, pre-assigned seating, reliable performance and simple low fares. In this study we analyzed the value of debt of the firm to help us compare the effects of percent changes of price per share in relation to growth as well as the percent change in price per share in relation to cost of equity. We found that Cost of Equity has a much larger impact on PPS than Growth.
Economic scale: European airline industry has achieved economic scale in which it creates a barrier of entry that the new entrants have to compete on a large scale (eNote, 2012). In order to compete to the existing competitors, easyJet offered low fares by minimizing cost as much as they can. easyJet’s low fare strategy focuses on offering airfare without meal service and business class seating. Moreover, easyJet also encouraged Internet sales to reduce the business operation cost generated by hiring reservation agents (Kumar, N & Rogers, B 2000). b.
Using a holistic marketing approach would benefit Classic Airlines tremendously. An organizations success is dependent on different departments within the company, its customers, products, and communication. The holistic marketing concept would be beneficial to Classic Airlines. The holistic marketing approach uses the interdependencies between various aspects of the company and society. If the CEO and Chief Financial Officer (CFO) would use the holistic marketing approach the airline would benefit with the change.
JetBlue Airways JetBlue has successfully implemented an integrated strategy operating a single-type aircraft fleet in a focused segment of the market. The company had success in gaining market share along the existing routes and wanted to expand into medium-sized cities that were being served by legacy carriers’ regional airlines. As JetBlue moved into these markets with shorter flights they realized a need for a more suitable aircraft. Having a smaller jet would make it easier to enter these new markets because of their lower break-even load and it would help to increase passenger loads on their original point-to-point flights. Because of the strategic alliance with Embraer, JetBlue played a significant role in designing the interior of the aircraft to improve passenger comfort, a key component of their differentiation strategy.
Singapore Airlines Workforce Management Program Singapore Airlines, as a service industry, valued the quality of service they provided for their customers and felt that their superior level of inflight customer service set them apart from other airlines. The SIA executives were known to comment that the SIA cabin crews were vital to their inflight service, so they set high standards for selection of cabin crew and evaluation of their performance. They felt that the attention to detail a passenger received inflight was a reflection of the overall service of the airline (Hart & Lytle, 1989). Their primary focus regarding candidate selection was on the candidates overall attitude toward work followed by “appearance and posture, language skills, grace and poise, and previous work experience” (p. 5). Young-Crew Policy SIA’s wanted their cabin crew to be a reflection of their multiracial society drawing from its Indian, Chinese, Eurasian, and Malay cultures and their rich customs related to hospitality and service (Hart & Lytle, 1989).
Boeing is the largest exporter by value in the United States. The manufacturing process experienced a major change and there was less production delays than before which not only helped in keeping an efficient flow when it came to their supply chain but also helped in better customer service which of course helped them hold on to crucial market share. Gaining market share of course hugely elevated their problems of losing customers or market share to Airbus (who in order to turn away customers from Boeing had initially adopted the strategy to lower prices of their products). Of course the customers were airline companies. Boeing’s success depended directly on the success of those airline companies.
JetBlue Airlines: A Strategic Analysis Founded on the principles of simple, low fares and bringing all possible comforts to their passengers, JetBlue Airlines has strived to become the premier discount airline in the United States. JetBlue offers their customers outstanding customer service, and amenities that rival the larger airlines and differentiate it from their competitors. While the airline is certainly a major player within their industry, there are opportunities available to grow and realize an increase in passengers,
3. The low-fare airlines strategy contributes a lot to the success of JetBlue. * JetBlue imitates Southwest Airlines to operate low-fare model that includes high-frequency, short-haul, point-to-point, low-cost service strategies. 4. JetBlue provides advanced and technological services to the customers, aiming to establish a professional brand in airlines industry.