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AIRLINE PASSENGER MARKETING by yaofenji

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									AIRLINE PASSENGER
MARKETING
week 13
Marketing
 Half of activities involving marketing
 Such as
   reservations
   ticket
   customer service agents
   baggage handlers
   b          h dl
   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
  Price
  Pi
  Promotion
  Place
Uncontrollable Factors
 Cultural and social differences.
                 g      y
 Political and regulatory environment.
 Economic environment.
 E i ti competitive structure.
 Existing        titi  t 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.
  etc
Unique characteristics of airline
product
 Cannot be kept in an inventory. an Empty seat – lost
 C
 forever
 Personalized service. Different people have
 different perception and opinions on the same
      i
 service.
 Bad product has no replacement.
 No way to check the quality before the sale.
    g            g    p              y
 Unguaranteed good product delivery – weather
 The service is produced in batches.
Price
 Volatile area
      j       p
 A major competitive variable.
 Affected by demand and supply.
 Production d       k ti
 P d ti and marketing cost.   t
Place
 Sales office.
 Online sales.
 Ease of purchase of ticket.
Consumer Oriented Marketing Concept

 Market segmentation
   Dividing potential customers
 Mercantile travel
                            protocol,
 Religious travel – special protocol food
 Funeral travel
 Education travel
        y
 Military travel
 Group travel
Growth strategies
 Market penetration
               p
 Product development
Marketing Strategies
 Computerised reservation systems
         g
 Travel agents
 Frequent flyer programs
 Code h i
 C d 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
       passenger
 more passenger, price reduces
Factors that affects demand
 Passenger preferences
            p      g
 Number of passengers
 Income level of passengers
 Competitors prices
 C     tit      i
 Expectation of future prices.
No frills
No-frills Air Fare
 Offer lower fare
                         y
 Eliminates unnecessary services such as
 complimentary drinks and business class seating.
                              decorated.
 Cabin interior is minimally decorated
 May have on-board advertising.
 Strict in ticket-related problems.
Current scenario
  AA     d         %d l
 IATA predicts a 15% decline in revenues.
 General aviation shipments fell by 46% in first half of
 2009.
 2009
 30,000 workers were sacked (Boeing, Cessna, United
 T h l i )
 Technologies).
 Many US military projects were cancelled or capped.
         F-22 raptors.
 Such as F 22 raptors
 More support for UAV - $5.4b
 GPS-mobile devices increase
 GPS bil d i – i
 SpaceX placing RazakSat into orbit
Aircraft P d t does impact airlines.
Ai    ft Product d  i    t i li
   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
                              l                  f
   arrangements to acquire long-range aircraft on commercially  ll
   acceptable terms.” To provide flexibility for its widebody aircraft needs,
   the carrier ordered eight new Boeing 777s, the report states.”
   htt //        i t     /           / i li    i t    ti l/f b
   http://www.iata.org/pressroom/airlines-international/february-
   2010/05.htm
IATA Financial Forecast, Mar 2010
 Airline     k t        t     l t the d f last             d
 Ai li markets rose strongly at th end of l t year and early in l i
 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.
       2 speed
 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

								
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