Airlines can be profitable

Divest non-profitable domestic routes and concentrate on building network hubs, bringing budget airlines into the picture, restructuring MAS on providing profitable international routes on a debt restructuring plan, keep costs at manageable level, while embracing Internet bookings and frequent flyer programs to increase sales and customer loyalty, reforms will ensure productivity and survival in a competitive market, the idea is to reduce capital requirements and maximise profits, and if outsourcing services will increase better quality and services, there is no reason not to embrace it.
Tourism is indirectly linked to air travel, and an innovative plan need to revitalise all your tourist attractions, for foreigner friendly travels and investments. I never believe in losing money, when you are in control of a national carrier, your hubs, and all your domestic air routes, with access to all areas of tourism. – Contributed by Oogle.

First you need to ask yourself these questions;

1) Which are my highest tourist visitors?
2) When do they come and what attracts them?
3) How long do they stay?
4) Are they social or business travellers?
5) How much do they typically spent?
6) Which areas or attractions do they visit?

When you have all the answers, you can formulate a plan:

1) Increase attractions, or work of arts that tourists buy.
2) Plan and formulate promotions, planning ahead typically for the whole year for everything including airplanes, frequency, fuel, human resource, with backup plan if load increases.
3) Plan if it is necessary to outsource if costs can not be manageable eg catering, engineering.
4) Invest in domestic hubs and outsource routes to budget airlines if you cannot manage.
5) Invest in A & P to attract tourists, and sell your attractions.
6) Remember, you are in control of all your resources, breaking even or losing money on one side doesn’t mean you will lose money on all.

Ticketing model to smooth cashflow

1) Allow hefty discounts for bookings for offpeak up to six months in advance, prepaid, with confirmation 1 week before departure, otherwise, discounts will be reduced.
2) Allow lesser discounts for peak period bookings up to six months in advance, prepaid, with confirmation 1 week before departure, otherwise, discounts will be reduced.
3) The idea is to maximise capacity, with more than 95% allocated for bookings 1 week beforehand, and only 5% for last minute travellers paying no discounts.
4) This will facillitate planning for maximising resources.
5) Block bookings by travel agencies will also be subjected to the model, with hefty discounts for prepayment.
6) 1 week there is more than enough time, to co-ordinate all resources.
7) When effectively implementing this model, you need to monitor to find out the response, and to tweek any wastage of resources.
8) Adjust your frequency, and if it is not possible, find ways to collaborate with other airlines, to maximise resources.
9) For first class and business travellers, the image and the services is more crucial than costs, but not for economy travellers, where the emphasis is “no frills”. Only a balance and the maximising and understanding the demands of these specialised markets, will you return to profitability, amongst your wildest dreams.
10) There is no one size fits all, and only an understanding of your core basics, will you be able to formulate a solution, to maximise profits with a limited resource input.

Advertisements

Author: Gilbert Tan TS

IT expert with more than 20 years experience in Apple, Andriod and Windows PC. Interests include hardware and software, Internet and multimedia. An experienced Real Estate agent, Insurance agent, and a Futures trader.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s