Introduction
It is widely known that a high level of competitiveness is a distinctive feature of air transportation. Therefore, a company will be started from a five-route small regional airline that owns three TP-300 planes with payload capacity equal to thirty passengers. Such arrangements are beneficial at the initial stage of the company’s existence since the aircraft with less than thirty seats is not obligated to get a special certification. The choice of the aircraft’s model is stipulated by the matter of its comparatively low cost and good serviceability on short and frequent flies. A new airline company should also be concerned with the issues of promotion, management, fares, and its organizational structure. The current paper discusses the matters listed above and gives recommendations for grounding a new airline company.
The Vision of the Company
As it was mentioned in the introductory section, in the beginning, the company will specialize in the carriage of passengers on regional routes with the use of three TP-300 planes. The reasons for this choice, by and large, include a better ability for competitive stability. In the long-term, the company might expand the number of owned aircraft and include planes that are suitable for longer flights and more passengers. Still, long-term success is impossible without concentration on the achievements that could be reached in the short-term perspective.
The company will service at the route types C and D with 340-360 round trip miles. This implies that the planes will fly from the local hub to a bigger regional one and the hub at the medium city with a stopover in a developing technology cluster’s hub. Although passengers have a higher willingness to pay for direct flights (Ennen et. al., 2019), the company has a probability not to recoup the costs by providing only nonstop flights. Therefore, it is strategically beneficial to terminate flights in the medium cities, and this way connects passengers with major airlines. In addition, the company is seen to be specialized in resort routes, which would bring uniqueness and increase the demand for the brand.
Most importantly, the company should never forget about the comfort and interests of its clients. The new company has several responsibilities to the passengers that deal with possible inconveniences such as baggage loss and flight cancellation. This way, the company promises to compensate the costs connected with the abrogation of the flight, including the refunding of the full ticket price and the paid accommodation at the hotel. The company is obligated to pay up to $500 per luggage that was not found within two weeks. In the case of the delayed luggage arrival, the company will give no more than $100 to cover the basic needs. The enterprise also gives a possibility to cancel a trip 48 hours before departure without any penalties. Remarkably, this option is not available in most translational airlines for passengers who do not choose a comfort option. The company is also ready to provide extra help to disabled people and permits traveling with animals if they have undergone a proper registration procedure before a flight.
Competitive Advantages
The market of airline companies that provide regional flights has a high degree of competitiveness as well as a market of transnational airline carriers. For this reason, the company should have some distinctive features that would attract clients. First of all, the issue of the quality of flights is unquestioned. Although hiring highly skilled pilots and the arrangement of training courses for them and a team lead to higher costs to maintain the fleet, this will increase flights quality and safety. This, in turn, will create trust among the clients and will help to establish brand loyalty – two features are essential in the management process. The second peculiarity deals with the specialization of resort routes. According to Holloway (2019), a new type of service profoundly affects consumers purchase behavior. Even though airlines that mainly fly resort routes are nothing new, not all regions possess such highly specialized aviation companies.
Challenges and Solutions
Due to the company’s specialization in resort routes, the managers must deal with a constantly changing environment. The tourism marketing environment is dependent on political, economic, social, and regulatory factors (Camilleri, 2018). Therefore, the managers must monitor the situation around the globe to be ready to accommodate the company’s needs and requirements for new circumstances. The strategy that helps to overcome the most difficulties is to hire the most gifted employees in the sphere of sales and marketing since they know how to increase brand recognition and sales. The department of sales will find out new financing options which will help to establish new routes and enlarge fleet size. Nevertheless, while the company is young, it is especially vulnerable to economic crises, and even credit cards for frequent passengers will never attract them to fly when the health pandemic situation is unstable. Thus, the managerial staff should pay extraordinary attention to advertisements among the target audience – middle-aged males and females of the middle economic class.
Conclusion and Recommendations
It is challenging for a new company to become a significant player in the market of airlines. It is not protected from economic hindrances, political, and social issues. In practice, the strategy of the company’s administration will change depending on its progress and unforeseen circumstances. While managing a small regional airline company, the emphasis should be put on the development of new routes, procurement of new planes, minimization of employee turnover, and sales growth. This could be achieved through the targeting of the intended audience and attracting the best specialists to work.
References
Camilleri, M. A. (2018). The marketing environment. In M.A. Camilleri (Eds.), Travel Marketing, Tourism Economics and the Airline Product (pp. 51-68). Springer.
Ennen, D., Allroggen, F., & Malina, R. (2019). Non-stop versus connecting air services: Airfares, costs, and consumers’ willingness to pay. Web.
Holloway, S. (2017). Airlines: Managing to make money. Routledge.