Determine the controls for your airline “Voyage Airlines” strategic planning and management.
Your discussion should include specifics on airline operations, pricing strategies, inventory/yield management, operating costs, and a measurement plan that outlines key elements such as, on-time departures and arrivals, aircraft in maintenance, factors affecting airline scheduling, and the problems of traffic flow, etc.
Utilize the previous papers on “Voyage Airline” for background information.
Include a summary of your mock airline’s control elements to recap the key points for the reader.
· Written in current APA format.
· 2-3 pages in length not including the title page and reference page.
· Must include 3 references. One reference must be a peer-review article.
· All references, including your peer-reviewed article, should be cited in the text of the assignment and on the reference page.
Optimizing Airline Revenue
How Voyage Airlines Will Optimize Airline Revenue
Voyage operates in the airline industry where there is constant fluctuation of airline costs that leave managements confused. There are also many other airline companies offering the same services and in the management of revenue, pricing plays a huge role in influencing important aspects such as increasing market share, increased product development, and penetrating new markets. There is complexity in pricing with many factors contributing to constant changes in prices. “Because the average airline operating profit is just 3%*, it’s crucial that airlines use effective pricing strategies to make the most money for their products – while maintaining affordability for their customers” (Fairfly, 2021). Therefore, Voyage has to price more precisely to optimize revenue by;
Passenger Profiling and Customizing the Travel Customer Offer
Voyage will profile its customers and adjust prices accordingly. It can group passengers as either leisure or business classes and ensure different prices that suit each group. This strategy will help Voyage increase customer impact and their satisfaction. For instance, fairs can be higher for leisure travels who book months before their departure. The prices can be low for business travelers who book when they need to travel. This will ensure that all types of travelers are accommodated and the airline will maintain its customers. Voyage has to understand which routes are mostly taken by business travelers and those taken by leisure travelers. Prices must be designed to suit every route and the type of passengers that go there.
Voyage has to understand its customers and generate custom prices that suit their individual attributes. The prices designed must consider a wide range of factors such as supply and demand, traveler’s history with Voyage Airline, the initiatives of the company, and pricing by its competitors. According to Shao and Kauermann (2020), considering all these factors will ensure the Airline prices fairly or even generate better prices that will allow it increase its revenue. Its pricing strategy will allow it to beat its competitors’ pricing and make higher profit margins from its services.
Building A Pilot Project
Voyage will do a test and understand what works for its model of business by measuring attribute-level customization. This will help the company determine optimum prices for each class and the highest possible amount each customer is willing to pay for a flight. They will then devise effective strategies of offering that price. According to Boin et al., (2017), the company can use customer travel profiles, purchasing patterns, number of passengers that book in a day, and the origin and destination of passengers. This information will allow voyage classify their customers and services effectively while designing differentiated offers and optimizing total revenue.
Aside from intelligence gathering, Voyage has to focus on research to capture revenue opportunities. With the growth in the airline industry and more route openings, travel frequencies are increasing and Voyage should continuously monitor the market and the evolutions taking place. The company will identify any variations and improve its demand projection processes when there is need. It has to adapt its prices and other offers to the changing business environment in the airline industry. To capture any revenue opportunities, Voyage has to stay close to the market, increase its surveillance, study all the activities and signals, and quickly adapt its strategies and tactics.
Boin, R., Coleman, W., Delfassy, D., & Palombo, G. (2017). How airlines can gain a competitive edge through pricing. McKinsey. Retrieved from McKinsey website: https://www. mckinsey. com/~/media/McKinsey/Industries/Travel% 20Transport% 20and% 20Logistics/Our% 20Insights/How% 20airlines% 20can% 20gain% 20a% 20competitive% 20edge% 20through% 20pricing/How-airlines-can-gain-a-competitive-edge-through-pricing. ashx.
Fairfly (2021). Top five pricing trends in airline revenue management. Retrieved from https://www.fairfly.com/insights/top-five-pricing-trends-in-airline-revenue-management/
Shao, S., & Kauermann, G. (2020). Understanding price elasticity for airline ancillary services. Journal of Revenue and Pricing Management, 19(1), 74-82.
Running Head: Build Your Airline 2
Build Your Airline 2
Build Your Airline.
1. The basics
The mock airline to be presented goes by the name Voyage Airlines an airline in aviation history founded by several friends’ entrepreneurs. We got our start in 2011, and ever since then we've been steadily growing our business. Our company's mission statement may be summed up as "to inspire excellence and dedication." We at Voyage Airline are quite proud of the fact that we are the most reputable airline of our kind on the West Coast. Our fleet is comprised of a total of 200 different aircraft. Voyage Airlines was founded by two male friends who identified; nevertheless, our staff members come from a diverse range of racial backgrounds and gender expressions. Due to the fact that we are modelled after Delta Airlines, we do not have a unionized workforce.
In addition to Hilton Head International Airport, Voyage Airlines has hubs on the west coast in the cities of Los Angeles, San Diego, San Jose, San Francisco, and San Bernardino; in the Caribbean, the airline has bases in San Juan, Puerto Rico, and Santo Domingo. Our ability to fly into and out of foreign airports has substantially increased the number of possibilities we have for traveling to other countries. Domestic travellers will also find them to be helpful in a variety of situations.
2. Airline's overall revenue focus.
The well-being of those present will always come before any and all other concerns. This suggests that funding for safety will come first, followed by funding for other activities in descending order of importance. Voyage Airlines is going to provide a sufficient amount of money to their budget in order to guarantee the security of their flights. As part of this process, you will need to do equipment maintenance, instruct crew members on proper safety procedures, and run drills to identify potential hazards.
Utilizing location information is one strategy that may be used to increase a company's share of the market. When we gave some thought to these issues, we arrived at the following conclusion: In which cities do they spend the most of their time? Which kinds of travel do they participate in? As a direct consequence of this, we located our hubs in popular tourist areas. Places such as Los Angeles and San Diego attract a sizable tourist population comprised mostly of individuals from different nations and cities. On the other side, the cities of San Francisco, San Jose, and San Bernardino are located in closer proximity to a number of the most well-known beaches in the state. It is crucial for airlines to make the necessary adjustments and investments in data analytics and location technologies in order to construct customer experiences that are in accordance with the needs of their customers (Vinod, 2019).
By focussing on the locations of our consumers, we are able to develop hubs that are more conveniently located for them. When a client has travelled with us in the past and enjoyed themselves, they are more likely to want to book another trip with us in the future. The demands of travellers make it necessary for Voyage Airlines to broaden its market reach. Because of the funds we get for new projects, such as the establishment of a new hub, we are in a position to successfully complete this task.
On every one of our domestic flights, including those to Los Angeles and San Diego, we provide you the choice to travel in our business class section. On the other hand, the vast majority of our passengers are traveling for pleasure and are on route to the coast or to one of our foreign borders. Despite the fact that our local routes make up the majority of our business, our international flights continue to be profitable. Voyage Airlines operates flights throughout the year; however, we see a marked increase in passenger volume during the Christmas season and throughout the summer vacation period. Our Los Angeles hub is the most popular throughout the spring and summer months, outperforming both our San Jose and San Francisco hubs. Because of the large number of snowbirds who visit throughout the winter, San Francisco is the most popular winter destination in the city.
The destinations that customers request is used to develop Voyage Airlines' route map. As a direct consequence of this, it is subject to ongoing change during the course of the year. According to the demand that we notice throughout certain periods of the year, we increase the number of flights to San Francisco during the winter, San Jose during the spring, San Bernardino during the summer, and so on. Domestically as well as internationally, we often provide on-demand aircraft service to our sibling hubs that are located on the other side of the ocean. The arrangement, in its whole, is comparable to a continuous flow of aircraft between our hubs.
The primary focus of Voyage Airlines is on achieving the goals outlined in the company's mission statement. We don't just say it as a slogan; rather, it is the driving force behind all we do: "Inspiring Excellence and Hard Work." At Great Travel, we are very proud of the commitment we have made to providing excellent customer service and quality training. Our ambition to expand and provide superior service to our patrons is the source of our enthusiasm.
Vinod, B. (2021). Influence of Revenue Management on the Airline Business Process. The Evolution of Yield Management in the Airline Industry, 293-312.
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