Strategic managementWhat will it take to be an industry leader in 2015? Who way it be? Airline industry is under the fast changing spell where companies are declaring lay offs due to several reasons. The global economic stagnation catalyzed for burning the issues some more powerfully. In fact, airline industry is struggling to get balanced in this world of stiff competition. It is very clear that those who hold the supremacy can no sustain it unless there is no strategic management. Obviously, those who are not using their strategic policies wisely cant come with the ever-changing tend.
It is very evident that the hospitality sector is very sensitive and highly volatile for many reasons. Hence we can say that those companies maintaining a well balanced portfolio would be there in the scene in 2015.the strategic management techniques are the following. Introduction – current situationThe major airlines usually earned their major profits from their long routes. Their short-routes were rather less profitable. On the long-haul routes, they were able to charge high prices because of special programme deals that existed between individual countries.
They carved up the long markets between countries - like U. K to Italy - between a limited numbers of airlines. For some airlines the long route market was particularly important. ln addition, each European country controlled flight access to its major airports and gave preferential treatment to its own national carriers thus reducing competition and raising prices. Now, in the next few years, the open skies policies still persisted but were likely to come to an end. Between the members the outcome was still not entirely clear and was associated with political negotiations. (Bradshaw, Bill, and Helen Lawton Smith, eds. Privatization and Deregulation of Transport. MacMillan Press Ltd. , London, 2000.
Freedom to Move. Ottawa, 1985.)Analysis 2.1 Summary of Macro- environmentCustomers and market segmentationThe European airline market can be broadly divided into two main market segments - business customers and leisure/ Domestic customers. 80 per cent of all customers fall in to the latter category. The fact is that they are traveling for holiday reasons such as study or visiting relations. They are important to fill the aircraft but do not represent the most profitable segment of the airline market.
As per many staff of various companies, its low cost is the winner. Everyone wants the cheapest price. It should be on time and cheap. It’s just like a bus service, its transport. Others are business customers. They are paid for by their companies and are engaged on business related activities. They are ready to pay for full-fare tickets and travel in greater comfort. Hence, the business customers are therefore the most profitable. There is some recent evidence that business customers are increasingly under pressure from their companies to travel on budget airlines.
The budget European airlines threat with strategyThroughout Europe Low-price flights have been available for many years: the holiday charter air companies offered them by taking groups of tourists on holiday using special flights and dedicated aircraft. However, such flights were not available to the general public at scheduled times. This all changed with the regulation of the European airline market in the 1990s'.