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The Success and Profitability of BERJAYA AIR Airline: Malaysia Success Story

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The Berjaya Air airline fleets has based its business and marketing strategies on achieving high, and profitable, load factors through absorption of unmet demand in three key air-traffic categories: unserved and under-served routes on which high unmet demand currently exists or can be readily developed; serving key niche markets where demand is either unmet or poorly served; and meeting peak traffic demands on certain key regional, seasonal, and variable routes where very high load factors can be predicted despite existing but lower-quality competition (MAS and Air Asia), or where competition cannot meet the demand.

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									The Success and Profitability of BERJAYA AIR Airline: Malaysia Success Story




According to Greg Ehrlich (2007) in his book Marketing Strategy: The Foundation to Building

a Successful Law Practice, niche market can be defines as a very specific market segment

within a broader segment. As Berjaya Air ventures to the business of airline services, the

company ventures into niche market has seen not only successfully involved with specialist

goods or services with relatively few or no competitors but also exclusiveness or some other

differentiating factor such as specifically targeted customer or needs. Therefore Berjaya Air

strategy in niche markets is set to produce specialized goods and services for “not ordinary”

passenger.



The Berjaya Air airline fleets has based its business and marketing strategies on achieving

high, and profitable, load factors through absorption of unmet demand in three key air-traffic

categories: unserved and under-served routes on which high unmet demand currently exists

or can be readily developed; serving key niche markets where demand is either unmet or

poorly served; and meeting peak traffic demands on certain key regional, seasonal, and

variable routes where very high load factors can be predicted despite existing but lower-

quality competition (MAS and Air Asia), or where competition cannot meet the demand.



In addition, Berjaya Air business strategies are designed around, and operated utilizing, the

most up-to-date electronic, informational, and aviation technologies to ensure low operating

and marketing costs, maximum efficiency in deployment of its resources, and a high level of

customer service and convenience.


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And it is this final element through dedicating the airline, its staff, and its organization to

providing a high level of customer service and convenience, and efficiently meeting the

needs, wants, comfort, and safety of the passenger, that will assure the proposed airline's

rapid acceptance in the market place and its long-term growth and success.



The six key characteristics leading to the success and profitability of this Berjaya Air are:



   1. Provision of high-quality service on routes and in markets that currently are either

       unserved, poorly served, or under-subscribed by existing carriers, thereby setting

       both a new trend and a new pace in air service to and within the Malaysia and

       ASEAN region, ensuring a friendly, cooperative, enjoyable, yet highly professional

       face to the customer.




   2. Employment of cost-effective, up-to-date regional and short range aircrafts such as

       DeHavilland Dash 7 are sized right for the market and the route, leading to higher

       load factors, reduced costs, improved efficiency and flexibility, greater passenger

       comfort and satisfaction, and higher net profits. Outfitting these aircraft with the latest

       aviation technologies and navigational equipment will help ensure the highest level of

       reliability, punctuality, safety, and customer satisfaction. By setting the company

       operation base hub and maintenance facility within Kuala Lumpur, at the Sultan

       Abdul Aziz Shah Airport in Subang, Berjaya Air has managed utilizing the route

       advantage to designated travels destination with easy access and smart location

       compared to MAS and Air Asia hub link which operated in KLIA.




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3. Utilization of the latest electronic and informational technologies in sales and

   marketing; reservations, ticketing and check-in; scheduling and resource planning;

   cargo tracking; and operational oversight. In 2005, Berjaya Air has also embarked on

   an exercise to secure an online booking and e-ticketing system which enables the

   company to reduce overhead costs and to provide booking flexibility to support its

   growing business requirements. The move will also prepare Berjaya Air to assimilate

   its ticketing system with global standards and also meet the December 2007 deadline

   set by the International Air Transport Association for the deployment of a paperless

   ticketing system. Such techniques as internet marketing, reservations, and sales;

   electronic ticketing and check-in; online quality control, resource planning,

   operational oversight, cargo and baggage tracking, and customer service, all will

   reduce staffing requirements while offering ease-of-use and greatly enhanced access

   by, and convenience to, the customer.




4. Recognition that not everyone is geared for the electronic world, leading the

   proposed airline to provide a high level of non-electronic service as well, particularly

   to the many newer, less-experienced travelers but future loyal customers and

   travelers found in the region. Small airline companies such as Berjaya Air have

   managed to excel at providing a specific niche product and services.




5. Development and implementation of cooperation, associations, and partnerships with

   other larger, more established, and highly regarded airlines both within and beyond

   the region such as Thailand to provide an extensive range of connections, through

   fares, frequent-flyer mileage sharing, and other passenger and client advantages

   through interline arrangements, code shares, common hubbing. For example,

   Berjaya Air’s “Great Holiday Escapes” online do-it-yourself holiday packages have


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       been well received since its inception on 15 February 2005. The “Great Holiday

       Escapes” promotion captured a larger segment of tourists travelling by air to popular

       destinations such as Koh Samui in Thailand, in addition to favorites such as the

       islands of Tioman, Redang and Pangkor.




As conclusion, Berjaya Air Sdn Bhd (Berjaya Air), despite their small size, can fend off

consolidation based on the stability of her niche strategies. Through intelligently analyze the

market and the competitive environment, the company has successfully understood and

exploited the potential offered by the market. Berjaya Air could never have achieved such

results without creating a unique and clearly articulated business strategy in niche market.




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QUESTION TWO

The proposed strategies for Berjaya Air intend to cut out new territory as it goes about

marketing itself. While it will clearly serve the target markets not only Malaysia but also the

neighboring country and ASEAN regions. It will just as clearly be a different kind of player on

the field, and will seek to be known not only as a niche oriented airline, but at the cutting

edge of the aviation business in ASEAN region.




The Berjaya Air’s emphasis on the latest information and electronic technology, and its

stress on comfort, convenience, safety and customer service, will be cornerstones on which

the marketing strategy will be built. The airline will utilize a combination of methods to

achieve the recognition that it both desires and needs. A fairly large advertising budget is

planned to buy the space and time to get its name and message in front of the largest

possible group of potential customers that it can. Given the crowded field of regional airlines

operates in Malaysia sky, it is better to come on like a lion than a lamb, or you may be lost in

the herd.




The Berjaya Air next plan will also utilize public relations to good advantage to extend and

supplement its advertising budget. The airline is opening up new markets, and it also is

transcending the technological barrier with the latest technology in the airline business, or

anywhere. It has big ambitions, but knows that it needs to serve the customer first to realize

them. And it wants to know and serve its markets better than anyone else.

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Everything about this airline, from its name to its colors, from the look of its planes to its

airport kiosks, from its smart but informal crew uniforms to its advertisements and literature

should set it apart. And it costs little more to do things freshly and smartly than the more

ordinary way of doing things. An organization is new only once in its life, so the airline should

grab that opportunity and get all the attention it can at the outset. And it needs to have both

an adequate budget, as well as an outwardly directed management, to achieve that end.




The overall concept and design of the airline sets the stage for its promotion. Marketing and

promotion will stress the unique qualities of the airline and the points that set it apart. Strong

public relations combined with well-placed, well-designed, distinctive advertising appealing

directly to people who are the airline's prospective customers will help get the word out.




Special effort must be made to develop and operate a highly functional, fast, rock-solid, and

user-friendly website for online information, reservations, and e-ticketing. Internet marketing,

combined with conventional non-Web marketing, will steer people to the website. The more

customers use the website, the easier and more pleasant the experience will be for them,

and the more economical and efficient, and predictable, will be the process for the airline.




While in general, special promotional fares and the like will be limited, the Berjaya Air may

consider launching with a special promotion simply to get known and to "get off the ground"

with planes that are not mostly empty. Overall, management and the sales and marketing

department will coordinate closely and will employ outside consultants as need be to assure

the most positive possible launch.




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In descending order of importance, the five critical keys to success for alternative strategies

for Berjaya Air:



    a) Human resource

Employing an experienced, highly professional management team that combines vision;

realism; financial ability; solid knowledge of the aviation business; familiarity with, and belief

in, the utilization and benefits of the latest aviation, electronic, and informational

technologies; on-the-ground knowledge of the region and markets to be served; realization

of the crucial importance of an organization's personnel to its success; and a total familiarity

with, and commitment to, the overall future mission and goals of the Berjaya Air.




    b) Marketing approaches

Intelligent, progressive, and aggressive marketing that identifies the Berjaya Air as a

different kind of player, one that is sharper and smarter, and with a higher level of

professionalism and operational standard than is the norm in the target region.

Concentration on safety, with highly trained, dedicated, and professional personnel, caring

for the passenger and the passenger's needs and wants, the advantages offered by

advanced technology, and straightforward, understandable, highly competitive tariffs and

fare pricing, all will form key pillars of the marketing strategy.




    c) Identify and expanding new routes

Identification, through careful market research, of unserved or under-served routes and city

pairs in the target market area with sufficient passenger demand to enable high load factors

and profitable operations utilizing the category of aircraft envisaged.




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   d) Upgrading the fleets

Use of an all-jet fleet of newer, modern, Western-built regional aircraft that offer a high level

of comfort, safety, and fuel and operational efficiency and flexibility, which meet all normal

aviation standards, and which offer sufficient, but not excessive, passenger and cargo

capacity on the envisaged routes.




   e) Investment in ICT

Use of advanced electronic and information technology to reduce staffing and other

operational costs; expand the potential market base; readily capture sales opportunities;

simplify and speed passenger, baggage, and cargo handling; and enhance customer

convenience and satisfaction.




Additional important, though less critical, keys to assuring the Berjaya Air continuous

success include the following:



   1. Identifying, negotiating, and entering into, in the pre-operational stage and early on,

       beneficial associations, cooperation, and partnerships with larger, more established,

       highly regarded carriers both within and beyond the target market region (i.e.

       ASEAN) to offer interline arrangements, through fares, frequent-flyer mileage

       sharing, and convenient hubbing and long-distance onward connections to

       passengers. Successful execution of this plan is crucial to the overall success and

       growth of the airline, and must be kept in mind in the organizational plan and

       structuring of the Berjaya Air.




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2. Establishing a high level of operational oversight and quality control that will ensure

   that the Berjaya Air always lives up to its marketing commitments and fulfills the

   promise of a high level of service, customer satisfaction, convenience, and safety, at

   a reasonable, highly competitive fare.



3. Avoiding the temptation to go head-to-head with established carriers on routes that

   already are well-served, unless solid evidence exists of additional, significant pent-up

   demand, or widespread customer dissatisfaction with existing services.



4. Maintaining flexibility that enables the Berjaya Air to always respond and adapt to

   changing market conditions and opportunities, without being erratic, and employing

   equipment, scheduling, and staffing on a basis that is sufficient to get the job done

   properly, efficiently, and at a high rate of return, without "overkill" or fielding costly

   excess capacity or, conversely, unduly cancelling scheduled flight operations.



5. Identifying, developing, and quickly and cost-effectively exploiting opportunities for

   new markets, new market concepts, and expanded sales potential.



6. Supplementing regularly scheduled passenger service with both regularly scheduled

   and also special cargo services when and where sufficient demand exists, and also

   with seasonal, peak-period, and other intermittent passenger services on certain key

   regional, seasonal, and variable routes where very high load factors can be predicted

   despite existing but lower-quality competition, or where competition cannot meet the

   demand. Larger, longer-range, or specialized aircraft may be employed on a charter

   or wet-lease basis to provide these supplemental, but potentially highly profitable,

   passenger and cargo services.




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   7. Looking to combine the core aviation business with ancillary marketing concepts and

       activities and ground-based operations that support, supplement, and complement

       the aviation elements of the business, including such activities as package, group,

       and charter-travel program offerings; value-added sales and customer services, both

       land- and Internet-based; construction and operation of enhanced passenger,

       baggage, and cargo-handling facilities and services; and other logical business

       pursuits both within and outside the immediate aviation business.



   8. Avoiding growth for growth's sake, and instead looking for solid niche-enlargement

       opportunities that will allow incremental, but always profitable, expansion.



As conclusion, the Berjaya Air’s alternative strategist consist of indentifying and to cater

target unserved and under-served markets, seek out niches and unmet demand, and offer a

higher level of service and a higher standard than the competition. By utilizing modern

technology to reduce costs, Berjaya Air can now able to offer better service and greater

convenience to its passenger.




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REFERENCE



Bandura, A. (1997). Self Efficacy: The Exercise of Control. New York: W.H.Freeman.



Berjaya Cooperation Bhd (2008) Annual Report 2008. Available at www.berjaya-air.com.

Retrieved on 2 June 2009



Doganis, Rigas. 2001. The Airline Business in the 21st Century. London: Routledge.



Greg Ehrlich (2007) Marketing Strategy: The Foundation to Building a Successful Law

Practice. New York: Routledge




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