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Competitive Airline Management Strategies

Competitive Airline Management Strategies

Airlines provides the only transportation network across the globe and it is crucial for  global business  development  and  tourism enrichment.  Air transportation is one of the most important services to offer both significant social and economic benefits.  By serving tourism and trade, it contributes to economic growth.  It also provides jobs and increases tax revenues. Air transportation is essential for the fast movement of people and cargo shipments around the world. As the  number  of  air travelers  and  the  volume  of  air  cargo  is expected  to  continue  to  grow, there is also an increase in the  pressure  on  all  the contributors  to the air transportation service to take advantage of opportunities and efficiently manage their service.

For proper management, there are a number of rules that the airline must follow. First, airline management must comply with the regulations of the airline’s home country. It must also take into consideration and comply with the regulations of the governments of the countries where the airlines fly to and from, and whose airspace  they  cross. governments  typically watch  competition  between  airlines and control  airlines’  strategic  decisions,  such  as merging,  acquisition  between carriers,  market entry  or  exit  and  pricing,  environmental regulations,  security regulations,  maintenance, and  safety  requirements.

Airline  management should  carefully  consider the  terms  of  their  agreements  with  the different airports  they  serve. several  factors affect  these  agreements,  including  available infrastructure (gates, runways, baggage handling, and so on), expected traffic, airport charges and incentives, competition from nearby airports, available landing slots,  congestion, and  operational  curfews.

The needs and preferences  of  its  potential customers,  the  travelers must be considered for effective management.  For instance, the airline should consider schedule convenience, competitive fares, onboard services, punctuality, and efficient customer service. Failing to fulfill the needs and preferences of customers might lead to losing them to other competing carriers or other modes of transportation.

 It is also imperative for the airline to participate in one or more alliances to expand its network coverage or share resources with other airlines. Several forms of alliance are available that reflect the level of cooperation between participating airlines. it is important for an airline to decide which alliance to participate in and how to share its resources efficiently with each member in the alliance to promote profitability.

Suppliers are crucial to the continuation of the airline’s operation. Airlines depend on suppliers to provide important items such as aircraft, fuel, spare parts, meals, employee uniforms, and so on. Also, in many cases, airlines outsource to vendors  some  of  their  jobs  and  services, such  as  aircraft  maintenance,  aircraft cleaning, ground handling, and sales. Therefore, an airline has to keep healthy relationships with its suppliers to continue operating successfully. Another entity in the air transportation industry that an airline has to deal with is unions. Different groups of workers form unions to achieve stronger negotiation power with airline management in terms of salary, benefits, or working rules. Keeping a good relation with labor  in  order  to  guarantee  smooth  operation of  the  business  is  one  of  the main objectives of airline management. Conflicts with unions might typically lead to negative actions by the unions, such as work slowdown or strikes, which usually impair the airline’s operation significantly. Finally, in most markets, there is tough competition between several airlines. typically, airlines continuously monitor the decisions  of  their  competitors  that  relate  to providing  capacity,  fare  levels,  fare restrictions, and departure times. in many situations, the decisions of the competing airlines proceed in a leader-follower pattern, where one airline takes an action and the other competing airlines try to find the best way to respond to this action. However, if airlines follow these steps, they could beat their competitor.

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