AIRLINE PASSENGER MARKETING week 13
Marketing Half of activities involving marketing Such as reservations ticket customer service agents baggage handlers flight attendants food service rep.
Aims A broad area of business activity that directs the flow of services provided by the carrier to the customer in order to satisfy customer s needs and wants and to achieve company objectives.
Marketing Ingredients Controllable marketing factors Product Pi Price Promotion Place
Uncontrollable Factors Cultural and social differences. Political and regulatory environment. Economic environment. Existing competitive structure. t Resources and objectives of the company (set by top management, workers need to work within these constraints).
Airline Products Encompasses of function phsychological aesthetic convenience etc.
Unique characteristics of airline product Cannot be kept in an inventory. an Empty seat lost forever Personalized service. Different people have different perception and opinions on the same service. Bad product has no replacement. No way to check the quality before the sale. Unguaranteed good product delivery weather The service is produced in batches.
Price Volatile area A major competitive variable. Affected by demand and supply. Production and marketing cost.
Place Sales office. Online sales. Ease of purchase of ticket.
Consumer Oriented Marketing Concept Market segmentation Dividing potential customers Mercantile travel Religious travel special protocol, food Funeral travel Education travel Military travel Group travel
Growth strategies Market penetration Product development
Marketing Strategies Computerised reservation systems Travel agents Frequent flyer programs Code sharing Hub-spoke service
Demand defined as the various amounts of a product or service that consumers are willing and able to purchase at various prices over a particular time period. price falls, demand increases more passenger, price reduces
Factors that affects demand Passenger preferences Number of passengers Income level of passengers Competitors prices Expectation of future prices.
No-frills Air Fare Offer lower fare Eliminates unnecessary services such as complimentary drinks and business class seating. Cabin interior is minimally decorated. May have on-board advertising. Strict in ticket-related problems.
Current scenario IATA predicts a 15% decline in revenues. General aviation shipments fell by 46% in first half of 2009. 30,000 workers were sacked (Boeing, Cessna, United Technologies). Many US military projects were cancelled or capped. Such as F-22 raptors. More support for UAV - $5.4b GPS-mobile devices increase SpaceX placing RazakSat into orbit
Aircraft Product does impact airlines. Carriers have to readjust their operation due to late delivery of new jets. Eg. Although the 787 flew successfully late in 2009, Continental Airlines is typical of carriers that have had to adjust projections because of the new production realities. We expect the first of our 25 Boeing 787 aircraft to be delivered in 2011 instead of the first half of 2009 as originally scheduled, the carrier states in its 2008 annual report. As a result, our anticipated mainline capacity in 2010 and thereafter may be reduced, particularly if we are unable to make alternative arrangements to acquire long-range aircraft on commercially acceptable terms. To provide flexibility for its widebody aircraft needs, the carrier ordered eight new Boeing 777s, the report states. http://www.iata.org/pressroom/airlines-international/february- t / / i it ti l/fb 2010/05.htm
IATA Financial Forecast, Mar 2010 Airline markets rose strongly at the end of last year and early in 2010, but growth remains concentrated in the emerging markets of Asia, Latin America and the Middle East, with benefits accruing mainly to airlines in these regions; highlighting the problems caused by ownership rules. Airlines in the large developed markets of Europe and North America face much more sluggish market growth. This 2-speed recovery in economies, freight and travel markets is reflected in the divergent performance of airlines in different regions. Helped by the strong year end we have cut our estimate of 2009 net losses from US$11 billion to US$9.4 billion. More significantly we now forecast smaller losses in 2010 of US$2.8 billion, compared to our previous forecast of US$5.6 billion; with the largest improvements benefiting airlines in Asia and Latin America.
Source IATA