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Globalization of the airline industry
Evolution of the airline industry
Evolution of the airline industry
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Airlines were a hard sell in the start, mainly due to other modes of transportation such as
the train, car, and boat. However, that started to change, as most airlines offered travel additional
flexibility with geographical area and time. In order to sell that flexibility and time, airlines have
to sell their product, travel from one area to another area, with that comes marketing. Airlines
have been utilizing the market strategy for many years during regulation and more than ever after
deregulation. Airlines have used billboards, newspapers, magazines, television, and now the
internet. However, things that will not change are the advertising of the product and the money
earned. Bottom line, “In the eyes of many consumers, every flight is the same beyond the core
variables of time and price—and even the price is often the same, down to the penny, lest one
airline lose market share on a competitive route. Airlines are “maturing as retailers” and are
motivated to find new ways to show off product investments. It’s not just about getting from A to
B. It’s about what are you going to get for that price (Bachman, Justin, 2013) ?”
Like most airlines Delta airlines utilize the most efficient ways of advertising to get the
“word out”. Get the “word out” is not a issue for today’s society, its more about how well that
“word out” is portrayed to the customer. Delta airlines follows the “4 P”’s of marketing Product
Price, Promotion, and Place to market its service. When advertising service several factors
determine the price and demand of the service, which involve economic and cultural factors as
well as other airline competition.
Selling the airline product is not easy, as it is almost like a military recruiter selling th...
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The Airline Industry is a fascinating market. It has been one of the few industries to reach astounding milestones. For example, over 200 airlines have gone out of business since deregulation occurred in 1978. Currently, more than 50% of the airlines in the industry are operating under Chapter 11 regulations. Since 9/11, four of the six large carriers have filed for and are currently under bankruptcy court protection. Since 9/11 the industry has lost over $30 billion dollars, and this loss continues to increase. Despite the fact that the airline industry is in a state of despair, JetBlue has become the golden example, a glimpse of what the industry could be.
Spirit addresses “price” by attempting to get the lowest possible fair for their potential customers. They have instituted their “unbundling” strategy that essentially removes all the conveniences that other airlines afford. Fees for checked bags, fees for flight changes, and no complementary in-flight beverages are just a few of the cost-trimming techniques employed. This strategy allows Spirit to come up with impossibly low fares. It also conforms to customers who just want to get from point A to point B without paying extra for services they don’t use. This strategy, coupled with an in-your-face “promotion” ploy, has made Spirit Airlines “the most profitable airline in the U.S.” (Nicas, 2012).
Delta does business globally in 503 cities in 94 countries and is the third largest airline in the United States. In 2003, Delta's daily needs included 7.3 million gallons of fuel, 109,000 meals and snacks, 151,000 bottles of water, 87,000 cans of soda, and 219,000 pounds of ice. Its daily operations also required large amounts of information relating to such areas as flight schedules, gate information, baggage handling, customer service, and tower operation. To be competitive in the airline industry, Delta required an efficient flow of operations. However, accurate advanced planning is nearly impossible because of such elements as changing economic realities and weather conditions, and unexpected maintenance issues.
International passenger traffic to and from Australia in December 2103 was carried by forty-eight international airlines that were in operation in that month, offering seats to over three million passengers. The number of realised passengers represents a growth of 7.8% over the number of booked seats in December 2012 (BITRE, 2014). Passenger utilisation however is on the decline, with December 2013 passenger utilisation being 80.2%, a fall from 82.4% at the same time the previous year (BITRE, 2014).
EasyJet’s provision of low cost flights and it basis of “the earlier you book the ticket, the less you pay“ gives it opportunity to target its customers. EasyJet also provides a number of aircrafts in various airports thus easily accessibility of their services; this acts as it drivers in the market control and competitive advantage. It also has the advantage of providing other services such as car hiring, internet services and restaurants (Saleem, 2010). The ‘Europe by easy jet’ established a resounding brand positioning that is effective across all the main markets and enhanced visits to easyJet.com. EasyJet targets the consumers through various channels that help them to reduce marketing cost per sales. In 2001, EasyJet launched ‘easy Jet mobile app” which was downloaded by over six million people which accounted for 5% of overall sales. Mobile boarding cards are available through the app and make it easy for cust...
Determining the marketing strategy for a massive airline, like United Airlines, is fairly difficult and extremely complex. Why? Because each city, season, route, and time of day will have some minor to major difference in how the airline presents itself. The difficulty in marketing and advertising for an airline is harder than other industries because each airline is selling thousands of different products. At first glance, United is selling flights, and that seems to encompass one product. However, selling a flight from Denver to Tokyo on a Monday is extremely different than selling a flight from Cleveland to Cincinnati on a Saturday night. The people flying that route, the cost, the airplane flow, the services provided, and the frequency/length of the flights all vary greatly from route to route, and the marketing strategies will fall in line with those difference. Although it would be impossible to determine an exact strategies, we will attempt to determine what United attempts to focus on, where they attempt to focus, and what their goals, both long and short ...
The marketing approach of Southwest Airlines is built upon their strong business model. They have successfully managed to target two specific market segments of the airline industry while remaining profitable. Their strategy is simple, to offer frequent non-stop flights with the lowest costs which appeal to both the business and budget travelers. By segmenting their target audience to specific demographics and ticket pricing, passengers know exactly what they are getting for the price they pay.
Carey, Susan, and Jack Nicas. "United Continental, Southwest Report Higher Profits." The Wall Street Journal [New York] 23 Jan. 2014: n. pag. Web. 12 Apr. 2014.
Eith largest airline carrier in US based on the number of revenue passenger mles fown.
Airline and travel industry profitability has been strapped by a series of events starting with a recession in business travel after the dotcom bust, followed by 9/11, the SARS epidemic, the Iraq wars, rising aviation turbine fuel prices, and the challenge from low-cost carriers. (Narayan Pandit, 2005) The fallout from rising fuel prices has been so extreme that any efficiency gains that airlines attempted to make could not make up for structural problems where labor costs remained high and low cost competition had continued to drive down yields or average fares at leading hub airports. In the last decade, US airlines alone had a yearly average of net losses of $9.1 billion (Coombs, 2011).
Delta Airlines has been a vibrant company in the airline industry, with great success over the years. Delta airlines started as a crops dusting company to serving more than 572 destinations, in 65 countries on six continents (Allan, H., David. H. ,2012). Delta airline moved its headquarters from Monroe, Louisiana to the city of Atlanta, Georgia. The great management strategies have portrayed from time to time to be fruitful even in the verge of a recession. With these consistency in delivery of services, it is clear that the company is out to outdo its competitors and turn out to be the greatest airline in the world.
What comes to your mind when you think about advertising? Is it a television commercial? It is a plain black and white newspaper ad? Or what about a social media app? Advertising has many different communication outlets that can be used to promote a company’s brand, product, or service. By using advertising, a company uses some combination of media to get a message across to customers. Companies tend to use multiple strategies while advertising so that all targeted audiences have a potential to view the ad. Delta Airlines uses many different types of strategies when advertising to its segmented customer base to help capture all media users.
The main threats to the industry over the next five years are the rise in oil prices, legislation, the TSA, and labor costs. Each of these threats affects the scheduled air transportation industry, not only endangers Delta Airlines, but the entire industry. As the price of labor increases for ground operations and pilots, this creates a burden on the industry by causing them to spend more to satisfy their labor requirements. The price of fuel increasing leads to the price of fuel increasing, which not only affects a single airline, but every airline. With each time that the crude oil price rises, the prices associated with the costs of refining the jet fuel as well as transporting it.
Although JetBlue focuses on service value through highly productive personnel and aircraft, potential consumers are still interested in value when they fly; the Price aspect of the marketing mix. Customers are interested in quality service at a reasonable price.
The target market of JetBlue airlines is customers who along with low cost seek services. The services provided by JetBlue included in-flight entertainment, TV on every seat, satellite radio, extra leg room, free unlimited snacks, and leather seats. The target market of JetBlue is also the leisure traveler, the low cost ticket seeking traveler, and the cost conscious business traveler. JetBlue has actually, posed a threat to the other low cost airlines like the Southwest Airlines.