Market Of Air Transport 1 example essay topic

1. MARKET OF AIR TRANSPORT 1.1. Market characteristics The air transport sector is characterised by a strong but cyclic growth and an uncertain profitability. During the 1st half of the century, the civil aviation sector developed its activities until acquiring a world dimension and generating a high added value. It became the 1st public transport mean of travellers and goods of great value for the international and intercontinental connections. It is a very sensitive sector to the economic situation because this sector is strongly dependant on the business cycles and political events.

At all events, the economic development determinate its growth: an GDP increase involves a more important proportional traffic increase, and contrary, the demand is very sensitive to the recessions. The income - elasticity of the demand for air transport being high, fluctuations of the economy have stronger effects on this activity. For example, after the crisis of 91, during which the world recession and the Gulf War caused cause a demand decrease, the sector knew a sustained high growth, as well on a world level as European. It is difficult to envisage the evolution of air transport. According to last market research's carried out by the principal manufacturers of planes, the world demand on this sector should continue to increase strongly during the 20 next years at intervals around 5% per annum. Moreover, it will be advisable to adjust these forecasts by envisage some events as "September 11".

Indeed, the customers, frightened by the terrorist leagues and their attacks, abruptly slowed down their frequentation's on the international flights. Data concerning the largest airline companies in Asia-Oceania ASIA- OCEANIA CUSTOMERS (millions $) PPK (millions $) TURNOVER (Millions $) EMPLOYEES PLANES 199, 08 412 130 46 879 195 360 1 051 Conclusion: The air transport market is a sector with strong added value. However, it is advisable to note that certain external events influence it, without any fast possible reaction of the airline companies (Economy, Policies). This market shows an interesting and regular growth, however regularly stopped by the world events (Gulf War, Terrorist acts of September 11). 1. Main issue Singapore Airlines is the leader in term of service in the air transport sector.

However, the group is announced a fall about its financial results. Of course, this period is the consequence of the various events of September 11, as well as the emergence of an increased and more fierce competition in the sector. The objective of Singapore Airlines is to improve its service offer as well as the development of a new communication campaign. How the group Singapore Airlines succeeded in fighting competition and not stay on its positions of leader?

1. SINGAPORE AIRLINES STRATEGIC MANAGEMENT 3.1 CONSUMERS 3.1. 1 Different kind of consumers We will join 4 kind of consumers in 2 categories: Professionals: Professionals Very Important Professionals Asian people Foreign people Asian people Foreign people Private individuals: Private individuals wealthy Private individuals Asian people Foreign people Asian people Foreign people. 2 Customers origin -75% are foreign, which represents 6 million seats (Either the highest CA) -25% come from the island, or 1 million seats sold...

1.3 tendencies of the consumer Conditions Class choisi e (s) Reasons "Night flight" 1st class - Comfort higher Need for safety thus more demanding request " Night flight "1st class - higher Comfort - Need for safety "Length mail" 1st class - Class raffles - Equipment adapted for a pleasant flight "Flight of day" - economic Class - gravitational Price Kind of flight Range Reasons " Night flight " -1st class - higher Comfort - Need for safety and looking for services -1st class -Middle class - Equipment adapted for a pleasant flight - -Economic class - Attractive price 1.1. 4 Brakes for consumers Being given the current economic situation in air transport business, it seems essential to develop the brakes for customers. The airline companies don't control the customers demand as in any other sector. Indeed, this market is dependant with the economic and governmental economic situation. Singapore Airlines is supporting the effects of all the attacks which have occurred in the United States on "11 September" and after.

The passengers are frightened by potential terrorist offensives and the number of reservations have fallen. A marketing campaign about safety could not modify the request. So, the company is dependent on the evolution of international political context Conclusion: after analysing this part, we will be able to note that the profile of the consumer is: -A professional (normal or high importance) -With a foreign nationality -Which chooses the first class business for a daytime flight and long flight - Which are very sensitive concerning safety 3.2 Segmentation Criteria High tech people Comfort people Economic people Exigent people Accustomed people Passenger origin -International - International -Local - International -Asia -Foreign people (Professional flight) Kind of flight - Long flight -Long flight - short flight - Long flight -Short flight - Long flight Nature of flight -Professional -Professional -Private individuals - Private individuals - Private individuals - Private individuals -Professional Looking for: - Modern Installation -Communication tools (Internet, fax... ) -Minimum wait maximum Comfort: -shower - oriental seats -Customised service -Quality of food -Minimum wait - attractive price -Comfort -High technology -Customised service -Reliability of the company -punctuality -Comfort -fidelity program Typical sign -Wealthy customers This kind of customers can pay for expensive service.

-No possible fidelity. This kind of customers only looking for the cheaper price. - Very exigent customers. -Medium fidelity level -A good buying potential -Regularly flight 5.2- The Price Singapore Airlines' prices are function of: - the class chosen - the period - the destination Some examples of tariff: Companies Korean Airlines Malaysia Airlines Cathay Pacific Air New Zealand Singapore Airlines Sideboard Auckland Auckland Auckland Auckland Auckland Price We notice that among the different proposed companies concern a flying with the same destination (Auckland), Singapore Airlines is one of the tariff the most expensive (the second one after Air New Zealand).

And, we remark that there is a difference between SIA and the lowest price company which correspond to nearly 300 euros. However, it seems that SIA has a "skimmed policy". Indeed, high prices made reference at a good-quality product in consumers's pir it. So, we can say that its policy in term of price corresponds perfectly to its target.

5.3- The Promotion - partnership with American Express for the launch of Singapore Airlines Kris flyer Credit Card. - 2% of net returns of the company are consecrate to advertising and promotion. - promotional offers are managed at a local level (knowledge of local habits and needs). - "Singapore Girl" is a key element of the advertising strategy for the company (image of the company associated to sensuality and exotic charm). - campaigns axed on the technological aspects of planes. Conclusion: a deep study near foreign professional customers ("heart of the target") proves that the sensual connotation was estimated whereas local people preferred the technological aspect of advertising campaigns synonyms of modernity and reliability.

5.4- the Distribution - travel bureau (exclusive system of distribution until 1973) - "Abacus" is its own system of reservation by Internet, exploited now by a lot of companies. - Possibility of packages: flights + cars hiring + hotel. - Web site of the company (web) Conclusion: the company has a huge distribution system which corresponds perfectly to Airlines Industry. 6- Recommendations - target in a best way its "key customers". Which consumers are the most profitable?

To our mind, the company has to adapt its promotion with the foreign professionals which represent a high percentage of sales revenues. In that way, SIA may axed its international means of communication more on exotic charm and air hostess than reliability. For this, the company must use different types of communication supports such as international newspapers, TV advertising campaigns. Besides, SIA has to improve its international web sites in terms of quality and ease to use. - Innovation. The company has to follow its investment policy in technological field in order to propose high-technology products in planes such as Internet access or telecommunication equipments.

- Customers satisfaction. The company has to pursuit its efforts in term of customers satisfaction in conducting more studies to be able to measure the level of satisfaction of consumers. The aim of SIA is to improve this level in examining the problems and in finding solutions faced to these problems. For example, the company should impose training programs about new technologies for the staff. Moreover, interventions of ground workforce must be less numerous and more efficient in term of timetable and places attribution. The travel in fact has to be agreeable from the reservation to the arrival.

Finally, knowing that the "heart of the target" is represented by professionals, it seems interesting to communicate on timetable respect and to put in place a repay-system if the timing is not respected..