Air Transport Management
Student Name
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Air Transport Management
Case Study A
Question 1: Airline code-sharing practice
In the airline business industry, code sharing is when one flight negotiates to apply a code used by another flight or it is an agreement made between different carriers to use one code for the transportation of passengers or cargo. Code-sharing is a way of strengthening and expanding market operations to enable a competitive ability in remaining to perform business even under strict restrictions (Mercado, 2011).
Because there are flights that do not have access to offering services to certain regions, it is arranged between the flight operators to designate a code that can be used by another flight to sell tickets on is behalf and the payment remitted as agreed. Such arrangements can be made through commission where the flight that sells tickets for another can be given a commission on the number of tickets sold (Wells, Alexander, & Wensveen, 2015). It helps in promoting the air transport business where instead of declining to receive passengers, it can be arranged to connect between cities where the flights for the designator company can pick up the passengers after the first or initiating flight has facilitated the passenger to the region where it does not operate.
But, if it has an agreement with another flight that can complete the journey without disturbing the passenger on the hustle of looking for an alternative flight to complete the journey. Through such an arrangement of code-sharing, it enables the different flights to make sales even if they are for part of the distance required for travel so that the accumulation of the little sales can sum to more revenues.
Even before COVID-19, code-sharing has been to enhance and promote one another in the airline business industry so that those airlines that are restricted in operating within specified boundaries can transact with passengers and enable them to receive the services of the other airline through the sharing of a code that can enable the revenues collected to be shared between or among the airlines that facilitated the connection of passengers from one destination to another.
Also, after the COVID-19 strike, movement restrictions were issued by almost every country in the world. Therefore, the act of code-sharing can operate where the airlines that are not permitted to move beyond certain boundaries can be set to transport passengers to nearby airlines where they could be able to take another without allowing the restricted flights from crossing the boundary (Belobaba, Odoni, & Barnhart, 2015). The major problem is that the COVID-19 pandemic led to a decline in the number of passengers hence causing a reduction in revenues in almost every industry besides the airline business.
Revenue passenger-kilometer is where a flight carrier offers to carry passengers on one kilometer. The concept is used to determine revenues by multiplying the products obtained by the number of revenue passengers. The revenue passenger-kilometer is used to measure the traffic of an airline so that the number of paying passengers can be used to determine the obtained revenue for the distance covered. During the pandemic, code-sharing and revenue passenger-kilometers can help in making improvements despite the decline in the number of passengers traveling.
As much as boundaries may remain closed for cross-border airlines, the act of allowing airlines to share revenues through codes or kilometers traveled can be a great and important way of making improvements in the revenue process where instead of remaining dormant the accessibility of few destinations an allow movement where the connection can be done and airline transport continue taking place.
Question 2: Potential conflicts and the creation of an optimal balance
City pair is a way that allows departure and arrival airport codes to be made known in the itinerary of booked flights. The city pairs can be single, direct, or more stops flights that connect a chain of multiple flights (Bazaargan, 2010). Use of the connectivity issues that can be interrupted any time, it is better as a schedule planner to have multiple flight pairs that can handle connections of different passengers according to their points of destination.
The conflict of interest may arise during the plan scheduling period where the existence of multiple choices of pairing may be available to solve a single problem since the business is supposed to work profitably, it will be required to undertake and choose the best pair that will create the highest advantage. It can be best handled in ways that can lead to the choice of a city-pair that can lead to passenger satisfaction and flight revenues (Clark, 2007). Pairs are made to enable easy movement from one point to another without causing difficulties to passengers where they can be forced to incur more costs or earn little profits.
While pairs can be made possible and the easiest ways of dealing with flight planning, the consideration of the critical path analysis is a major concern so that the route undertaken should be the shortest possible with the least costs involved. However, even if the route is chosen does not lead to the shortest, it has to meet the needs of both the passenger and the flight.
Another great concern that passengers and flights consider is the compression of the duration taken to complete the journey. While planning for city-pairs, time is a major factor that should be put into consideration. When more time is spent on the chosen flight, more costs can be attracted hence lowering flight charges due to lack of urgency needs. However, the distance chosen from the critical path may be short and lead to passengers paying higher charges due to meeting their deadlines or the times for business and work meetings without fail. In planning, the pairs must be considered from the point of time management and the passenger urgency to travel.
The calendar must be considered when scheduling flights. There are those dates with special occasions that lead to more traffic in terms of travelers where the allocation of more flights has to be made available. As a schedule planner, ensuring enough flights during a season that has more passengers can be the best time to take advantage of the mass and earn more revenues (Holloway, 2009). Therefore, in the paring of cities for flights, the calendar is very important in determining the number of passengers. Demand for traveling and the availability of flights must be maintained to prevent the aspect of engaging in matters related to passenger disappointment.
Without forgetting the issue of resource-leveling heuristics is a major concern when planning for flights. It may be found out that the number of flights within a region is more than enough and assigning some to other airports can bring more meaning in terms of operations and revenue generation. It is advisable as a schedule planner to conduct a heuristic resource-leveling strategy and ensure that the flights are assigned in the best manner.
Case Study B
Question 3
Impacts
Positive impacts of SPEED Airlines strategy
The present world has experienced an increase in the number of obese people. The more people traveling suffering from obesity can lead to meeting the recommended weight of the flights hence cause problems because the management may want to fill all seats by counting passengers’ heads. The reduction in the number of flight attendants may lead to a reduction in the operational expenses being cut down. The saved money from the wages and salaries paid to the 250 attendants can be diverted to other necessary services and operations so that SPEED Airline can manage to meet passenger needs.
The strategy of doing away with travel agents will save the airline an amount equivalent to 75% from every sale of ticket. When dealing with travel agents, the agents demand a commission but the website can only cost high during implementation and enable 100% of the tickets sold. The website will lead to connecting the passengers directly to the airline where the agents that may have been diverting passengers to other airlines due to extra benefits promised can be cut short. SPEED Airline has a strategy that will fuel its profits as it will enable the airline to save more and earn from every service delivered to passengers as it will be done based on factual units of measure such as passenger weight.
Negative impacts of SPEED Airlines strategy
Employees perform a great job and can manage to maintain the quality of their work within recommended hours. SPEED Airline’s decision to relieve at least 250 flight attendants may cause pressure to the few who will be retained hence fatigue and lack of meeting passenger service satisfaction will be questioned. Therefore, the reduction in the number of flight attendants will compromise SPEED Airline’s quality of service negatively.
While shifting from travel agents to online purchase of flight tickets can help the airline save 75% of the cost of an airline ticket, the travel agents help in booking for those passengers o are busy and cannot have time to view the website for the purchase of tickets. The idea may cost SPEED Airline losing those passengers who always delegate the purchase of their tickets through giving orders to the travel agents. A shift of the passengers who depend on travel agents can consider the use of SPEED Airline competitors since they may still be using travel agents. The statement issued by SPEED Airline CEO, “a 12- or 13- year-old passenger, who is small in terms of size and weight, won’t have to pay an adult fare, based on current airline fares that 12 years and older does pay the adult fare” can create price wars competition in the air travel industry.
Recommendations
The cost strategies of SPEED Airlines
Airlines have a set capacity of the number of passengers it can carry on a trip. Apart from the number of passengers depending on the sitting capacity, the weight of a flight must be factored in before taking off. The strategy will have both positive and negative effects on SPEED Airline. If the flight receives more passengers that weigh more, it can take off with some empty seats but meet the threshold for a trip due to charging based on passenger weight (Ashford, Coutu, & Beasley, 2013). Similarly, if the passengers fill the seats but weigh below the recommended weight of the flight, the airline will operate at a loss as the set target per trip may not be met.
Due to the new strategy of the cost expected to take effect, it should be implemented in a way that balance has to be created within the flight to ensure all seats are filled and the weight balanced. The distribution of passengers can be done within the flights so that balance can be created. Instead of customers booking a specific flight, it should be made clear that the allocation of the flight will be done by the airline management. In the case of passengers traveling as a group, they should communicate in advance to prevent being split between different flights.
The new pet service offered by SPEED Airlines
Domesticated cats, rabbits, small dogs, and birds can transmit diseases to humans. The idea of allowing passengers to travel together with their pets in kennels can raise concerns from other passengers who may not be liking pets (Doganis, 2002). Keeping the pets under the seat can expose the passengers to various dangers such as the infection of airborne diseases that can be transmitted by pets to humans. Instead, the pets can be created room in the cargo flights where labeling can be done and the respective passengers wait for the pets at the destination. SPEED Airline can create room for pets in the cargo planes where enough ventilation can be made available for normal breathing.
Pets are mostly kept for luxury and luxury things are considered to be expensive. If SPEED Airline successfully implements the mode of carrying pets alongside the passengers, it can increase its revenues as the pets will be charged for the travel service (Graham, Papatheodorou & Forsyth, 2010). Since the demand from passengers to travel with pets has been high and no airline has considered implementing a strategy of allowing the request, SPEED Airline can secure more customers with such a need. The airline can be recommended to implement the idea in the best manner and meet all requirements s that it can earn more income with the introduction of a new service in the industry.
References
Ashford, N., Coutu, P., & Beasley, J (2013). Airport Operation, 3rd edition. New York: McGraw-Hill
Bazaargan, M. (2010). Airline Operations and Scheduling. (2nd ed.), Ashgate Publishing Ltd.
Belobaba, P., Odoni, A., & Barnhart, C. (2015). The Global Airline Industry. (2nd Ed.) John Wiley & Sons, Ltd.
Clark, P. (2007). Buying the Big Jets: Fleet Planning for Airlines. (2nd ed.), Ashgate Publishing.
Doganis, R. (2002). Flying Off Course: The Economics of International Airlines, 3rd edition. London and New York: Routledge
Graham, A. (2013). Managing Airports: An International Perspective. (4th ed.), Butterworth-Heinenmann.
Graham, A., Papatheodorou, A., & Forsyth, P. (Eds.) (2010). Aviation and Tourism: Implications for Leisure Travel.Ashgate Publishing.
Holloway, J. C. (2009). The Business of Tourism. (8th ed.), New York: Financial Times/Prentice Hall.
Mercado, F. (Eds.) (2011). Airline Industry Mergers: Background and Issues. New York: Nova Science Publishers.
Wells, Alexander T., & Wensveen, John G. (2015). Air Transportation: A Management Perspective, 8th Edition, Thomson Brooks/Cole.