REMO INTERNATIONAL COLLEGE

AIRLINE & AIRPORT MARKETING MANAGEMENT

II BBA(AAM)- THIRD SEMESTER

MICHEL PORTER ‘S FIVE FACTORS AND THEIR APPLICATION TO

AIRLINE

The Airline industry provides a unique service to its customers. It transports

people with a high level of convenience and efficiency that cannot not be
provided by any other industry or substitute. Airline companies pride themselves
on the way they treat their customer during the flight. They have things such as
food, drinks, entertainment, and a welcoming staff. The service of transportation
is provided in other industries but the airline surpasses all of them when it comes
to timeliness. The geographic scope of the airline industry is at a global level.
Some firms are able to fly their planes all over the world while others focus on
smaller geographic areas.

The five forces model is one way to answer the first basic question in strategic
management; “Why are some industries more attractive than others?” This model
shows the five forces that shape industry competition; threat of new entrants,
bargaining power of buyers, threat of substitutes, bargaining power of suppliers,
and competitors. In order to analyze the airline industry we have look at each of
these forces.
Bargaining power of Buyers

The airline industry is made up of two groups of buyers. First, there are individual
flyers. They buy plane tickets for a number of reasons that can be personal or
business related. This group is extremely diverse; most people in developed
countries have purchased a plane ticket. They can do this through the specific
airline or through the second group of buyers; travel agencies and online portals.
This buyer group works as a middle man between the airlines and the flyers. They
work with multiple airline firms in order to give customers the best flight
possible. Between these two groups there is definitely a large amount of
buyers compared to the number of firms.

There are low switching costs between firms because many people choose the
flight based on where they are going and the cost at the time. This is some loyalty
to firms but not enough for high switching costs. Each customer needs a lot of
important information. They need to know the details of what is provided during
the flight. Buyers need to understand the timing of the flight and the safety
aspects of flying in general. The service provided is unique. Each airline has a
niche. Some airlines focus on cost, while others focus on having the best
amenities, etc. Overall the bargaining power of buyers has an extremely low
threat in this industry.

Bargaining Power of Suppliers

Next we look at the bargaining power of the suppliers. In this case the major
suppliers are the airplane manufacturers. The top two manufacturers in the world
currently are Boeing and Airbus (Odell, Mark). In this industry the inputs are
extremely standardized. Airline companies only seem to differentiate with
amenities. The planes are very similar. Currently some manufacturers are trying
to make their plans more eco-friendly.

Airline companies cannot easily switch suppliers. Most firms have long term
contracts with their suppliers. Planes are such high capital products that firms
probably make long term loan agreements and have more favourable credit terms
when they don’t switch companies. It is difficult to enter into the plane
manufacturing industry because of the capital needed to enter. The amount of
money and expertise needed to make even one plane is around 200 million
dollars. For this reason there are very few suppliers in the airline industry. Airline
firms are the only source of income for these manufacturers so their business is
extremely important. Based on these things the bargaining power of suppliers has
a low threat as well.

Threat of New Entrants

Threat of new entrants is another major aspect of the five forces. This aspect has a
low threat for the airline industry. There are two aspects that do however raise the
threat level. First, there are extremely low switching costs. Second, there are no
proprietary products or services involved.

Even with these two aspects the industry still has a very low threat overall.
Existing firms have a large cost advantage. This industry requires a large amount
of capital and without a strong customer base there will be little to no profit in the
first few years. Existing firms can and will use their high capital to retaliate
against newer firms with whatever means necessary such as lowering prices and
taking a loss.

Although there are low switching costs between brands, consumers tend to only
chose well-known names. Airline tickets are expensive so people don’t want to
give that money to firms they don’t trust. There is also a huge safety aspect
involved and most consumers feel safer with firms that have been around for a
long period of time. This industry requires plane and flying experience which also
lowers the threat of entry. When firms decide to enter the market they first have to
become licensed which can take about a year. After that they are constantly being
regulated by several organizations such as the Federal Aviation Administration
and the Department of Transportation. The time and money spend to solely open
an airline company is enough to prevent most people from entering the industry.

Threat of Substitutes

After looking at the threat of entry it is important to also consider the threat of
substitutes. This industry has a medium substitute risk level. There are substitutes
in the airline industry. Consumers can choose other form of transportation such as
a car, bus, train, or boat to get to their destination. There is however a cost to
switch. Some means of transportation can be more costly than a plane ticket. The
main cost is time. Planes are by far the fastest form of transportation available.
Airlines surpass all other forms of transportation when it comes to cost,
convenience, and sometimes service. Consumers do sometimes choose other
methods for various reasons such as cost if they are not traveling very far which
raises the risk.

Rivalry among Existing Players

The last area of the five forces is the rivalry among existing players. The rivalry
in the airline industry is very intense for many reasons. The industry is currently
very stagnant. It seems to be in the mature stage of the business cycle. The
number of competitors stays the same in the long run and it doesn’t seem to be
under or over capacitated. The fixed costs are extremely high in this industry.
This makes it hard to leave the industry because they are probably in long term
loan agreements in order to stay in business. The products involved or the planes
are highly complex which also heightens the competition.

The competition is lessened by the brand identities of different firms. For

example, JetBlue is known for its amenities and Southwest is known for its low
prices. The market share seemed to be equally distributed because each company
has its own part of the market and because switching costs are low none of the
firms can really hold a large percentage of the market.

The strongest forces in this industry are the competition of existing firms and the
power of suppliers. The rivalry of existing players is high and will push out any
firm that doesn't have enough capital. Suppliers are strong forces because planes
are so costly to make. If the suppliers changed the credit terms by even a small
amount it could mean a significant loss for the firm. On the other hand the other
forces involved seem to have a weak threat. It is costly and time consuming to
enter the market which lowers the risk of entry. Buyers have a weak force because
of the low switching costs and substitutes are weak because they are usually too
costly.

The profit in this industry is high because for most people flying in necessary. It
is not a trend which makes this industry profitable for the long term. Airlines that
are more profitable are in a better position because they usually have more planes
and a larger variety of flights which provides further convenience for the
consumer.

Recently there have been some changes in some of the forces. Some airplane
manufacturers have been making eco-friendly planes, which is a change in the
bargaining power of suppliers. This would differentiate the products, raising the
threat of suppliers. Another recent change is the use of web portals such as
Expedia to book flights. This positive change creates a whole new group of
buyers and makes purchasing flights faster and easier. The increase in gas prices
has also been a positive change for the industry because it lessens the power of
substitutes. People are more willing to fly to their destination if driving would be
more expensive.

After looking at the Five Forces Model firms should make dealing with the
competition their main priority. The other areas in the model seem to have an
overall low threat so existing firms don’t have to focus on those areas as much in
their business strategy.

Airline Business and Marketing Strategies-Common Mistakes

When an airline fails, it is, of course, a tragedy for those affected. A bankruptcy
does, however, at least give an opportunity for lessons to be learned. The problem
with the airlines is that they rarely are. Each airline failure does, of course, reflect
some unique circumstances, special to a particular case. What is so depressing,
though, is that the same issues, mistakes and problems seem to arise time and
again. In this last section of the chapter, we review some of these common
mistakes made by failed airlines. The writing of classical economists suggests that
firms should be viewed as rational entities, Lead by entrepreneurial managers
whose objective is profit maximisation. In the airline business, such a theoretical
position is often far from the true one. Airlines are set up and run for many
reasons, which often make the achieving of satisfactory profits impossible.
Sometimes, these objectives may be imposed from the outside. Equally, they may
reflect the failings of the firm’s senior managers. This situation presents itself
most clearly in the case of many state-owned airlines. Almost all governments
which still own airlines presumably expect that the carrier should be run to make
a profit, to ensure that it is not a burden on the taxpayer. The problem is that
either explicitly or implicitly, it is set a series of objectives which make
profitability difficult or impossible. Amongst these is the need to maintain
services on unprofitable routes for social or political reasons, or to assist
economic development of backward regions. Also, airlines may be required to
keep domestic air fares artificially low, due to the desire to control inflation, or to
maintain unnecessary high levels of staffing because the government wishes to
minimize unemployment. Even worse, though not strictly related to the question
of objectives, governments often seek to interfere with airline management
appointments, with senior management jobs being given to political supporters
who have few qualifications to fill these demanding positions. A final, but sadly
common problem in the developing world is that government employees and
supporters travel a great deal on the national airline, but the government does not
then pay the bill for this transportation. Ironically, many state-controlled airlines
in developing countries are owed millions of dollars by the governments that own
them. The question of conflicting objectives is most obvious in the case of state-
owned airlines, but as an issue it is not confined to them. Many private airlines are
in practice operating to a mixed and confusing set of objectives. Some privately-
owned carriers are ego-trips for their owners. This is because aviation is a high
profile activity where it is normal to achieve easily a great deal of media
coverage. It is remarkable in the airline industry how many small airlines have
grandiose names playing on the themes of an “intercontinental” or “world”
presence. It is also noticeable that these airlines are often based in an impressive
head office described as a “global headquarters” building. A further indication of
an airline being driven forward by its owner’s ego is that the owner then ensures
that their name is incorporated in the name of the airline and that it is painted on
the side of each aircraft in large letters. Ego- driven airlines are rarely successful
because they tend to grow based on the owner’s desire for more publicity and a
still higher profile rather than on opportunities for profit. Even if the owner has
very deep pockets, there will come a point where losses can no longer be
sustained. A further problem with some airlines is that they are essentially
hobbies for those that set them up. Besides being a business, aviation also
provides a fascinating hobby for many people. It is one thing to pursue this hobby
by plane-spotting. It is quite another to take it to the extent of setting up an airline.
Hobby-based carriers only tend to survive if the owner is extremely rich and
prepared to lose a great deal of money. A final, difficult objective for an airline to
pursue in practice is that of being a vehicle for revenge. There have been a
number of cases where someone who has been fired from one airline sets up a
rival carrier designed to allow them to get even with the people who dismissed
them. Again, emotion rather than economics will be the driving force behind
decision-making and success will be very difficult to achieve.
Airlines are part of the service industry, competing to offer the best experience of
several similar competitors. As such, marketing including an airline advertising
strategy, social media, and other programs can make the difference between
gaining customers or losing out to other airlines. To attract the most customers
and generate buzz, airlines must remain enticing and competitive. Here are four of
the best strategies for marketing airlines.

Providing Loyalty Programs

By creating a loyalty program, you will encourage flyers to become repeat

customers, booking additional flights with your business. Most airlines will
charge the same fare for identical trips. By letting a customer become eligible for
perks by earning points, you can gain an advantage over the competition. Perks
can range from seat upgrades to free flights, airport lounge passes, or discounted
parking spaces. Be creative and you’ll find that loyalty program members may
book exclusively with you to maximize their benefits.
A Creative Airline Advertising Strategy

Thinking outside the box for advertising can help you work your way into your
customers’ daily lives. The best airline advertising campaigns are a combination
of traditional and non-traditional, so in addition to online and print marketing,
make your presence known in the community. Air France sent trucks into New
York City to distribute free food samples to people in various neighborhood’s.
Delta created Sky360 Lounges at sporting events and food festivals. Any way you
can get your name out to the masses and get people to remember you is good for
business.

A Strategic Social Media Campaign

You need to make sure you’re reaching customers on social media to deepen
relationships and humanize your brand. Find out which platforms your customers
frequent and build a page there. You can use that page to offer sale and
promotional updates, provide customer service, or give customers a fun behind-
the-scenes look at your company. Customers love to hear about community
initiatives airlines participate in and stories of employees going out of their way to
satisfy their customers

Providing Flight Perks

Creating an entertaining in-flight experience with features like in-seat systems

that play current TV shows, music, games, or movies, can give you a customer
advantage. For example, Open Skies offered their passenger’s iPads with various
entertainment options on select flights. By incorporating perks into your
marketing strategy, you’ll entice more customers to choose your airline the next
time they’re looking for a flight.
When you get creative with your marketing and create the best airline advertising
campaigns, you have a chance to rise above your competitors when people are
looking for a flight. The Aerospace Marketing Group can help you come up with
a modern marketing campaign that will let your company personality shine
through. Call us today to find out how we can help you gain more business.

Concept of Product and Relation to Airline

The airline product consists of tangible and intangible elements. It is important to

remember that passengers are purchasing more than the airline product, they are
also acquiring the benefits (for example, a customer experience) which they
associate with it. Hence, the process of product development and market research
should be ongoing if an airline is to keep itself up-to-date with the latest
developments in the market place. The airline marketers should know what
constitutes a high standard of customer service, particularly toward profitable
customers. Nonetheless, there are different kinds of customers, including short-
haul, long-haul, leisure and business passengers, who may hold different
expectations from their airline. They may have certain needs and wants which
could be higher on their list of priorities. In conclusion, this chapter suggests that
customer centric airlines could follow a total quality mantra where every process
is continuously improved for the benefit of customers. Such a total quality
management approach implies that all members of staff are responsible to
improve their airlines’ service quality.
As mentioned earlier, customer needs and wants are extremely important with
regard to the airline product. It is possible to identify needs for different customer
segments. For example business passengers may need punctual services (Peterson
et al., 2013); whilst the leisure passengers may usually demand low prices (Tribe,
2015). Generally, the price is higher on the list of priorities for the leisure
passengers than it is for the business passengers. However, this trend may be
changing. In the past, business travellers were relatively inelastic as they were
prepared to spend more for their seats (Swarbrooke & Horner, 2001). Moreover,
the arrival of increased competition, particularly from low-cost carriers seems to
have changed this demand.

There are tangible and intangible aspects of the airlines’ products. The tangible
characteristics of the business class service may include; the provision of separate
check-in counters, special lounges, priority boarding, superior inflight meals,
inflight entertainment, et cetera. The intangible features of the airlines’ products
include; friendly check-in employees, courteous cabin crew, et cetera. Yet, it
could be difficult to distinguish the consumers’ needs from wants. This task is
made even more difficult by the competitive environment in which the airlines.

Short-haul Passengers: The short-haul passengers’ most basic needs are

conveniently timed, high frequency flights. The shortest journey by air is usually
a day trip. Very often, day-return itineraries are intended to business passengers
who start and finish their business on the same day. However, different markets
may have different timing requirements. Generally, early morning, outward
journeys and late evening, return journeys are convenient for many passengers,
and are often demanded. Most markets have a Monday to Friday requirements for
such types of journey. The short-haul passengers may opt for point-to-point
journeys (a flight from origin to destination). Alternatively, they may use short-
haul routes to connect with long-distance flights. In this case, the timing and
frequency of the short-haul flights ought to be feasible for those passengers who
may wish to make a connection onto another long-haul flight.

Long-haul Passengers: Long-haul passengers may have certain wants which

may be higher on their list of priorities, than they are for the short-haul passengers
(some aspects of these needs and wants have been previously discussed): The
Marketing Environment). Specifically, the airline product comprises the
following elements.

 Aircraft type, including the cabin’s layout (galleys, lavatories,

aisle spaces, seating, entertainment, and other features) and the cabin’s noise
levels;
 Punctuality and on-time performance, in terms of arrival and departure
times;
 Price influences the level of demand. Moreover, the characteristics of
the aircraft affect the overall costs, and the air fares that are charged to
passengers.
 Schedule points to be served; direct or intermediate stops, timings and
frequencies.
Fleet and schedules Related Product Features

In this section, we will focus more on the supply side of the

product, by examining the product decisions that airlines must
take. In doing so, they face a dilemma. They presumably wish to
offer a product which is as attractive as possible to the customer.
However, an attractive product will often be an expensive one to
produce. Therefore, decisions must often be based on a complex
trade-off between product quality and production costs. In
making this trade-off, the overriding factor to be taken into
account will be the business strategy of the airline concerned.
Optimum decision-making for an airline in a Cost Leadership
position will be quite different from one aiming at multi-product
Differentiation. The work is divided into two. In this section,
product features which relate to the aircraft and the way in which
it is used are considered. In the next, we will look at more
general customer-service related product decisions. In all cases,
we will be seeking to define the current areas of controversy and
to define the ways in which an airline can achieve a Sustainable
Competitive Advantage.

Cabin Configuration Classes of Service

The principle of trading off product quality against production

costs is well-illustrated by this first area of decision-making. An
airline seeking the lowest costs of operation will configure its
aircraft in a single class, and will place as many seats as possible
in each plane. Safety considerations will give an absolute limit.
These will reflect both the structural capabilities of the aircraft
and the need to meet standards for emergency evacuations. The
other question will be that of passenger comfort. There seems to
be an acceptance in the industry that a seat pitch of 28 inches is
the minimum which passengers will accept. Even with modern,
lightweight seats this represents a poor standard of comfort, and
most airlines do not go as far as this extreme. 29 inch or 30 inch
seat pitches are usually given, even by airlines focusing on the
European leisure air travel market where low production costs
have been a traditional preoccupation. Decisions about basic
seating comfort standards have a very significant impact on unit
cost levels. For example, leisure-orientated airlines will usually
place 235 seats into one of their most commonly-used aircraft,
the Boeing 757. This results from a mix of seats at 28 and 29
inch seat pitches. Raising the seat pitch to 33 inches − typically
used by scheduled airlines − reduces the number of seats that can
be placed in the same aircraft to around 180. Thus a decision
about cabin comfort can affect unit costs by 30%. An airline
whose marketing strategy is based on targeting both the business
and leisure traveller cannot rely on a cabin configuration aimed
at producing the lowest operating costs. Instead, they must
develop a multiproduct philosophy, one of the manifestations of
which is the need to have different classes of service on board
their aircraft. The cost implications of doing so are substantial,
and are becoming greater all the time. The problem is that as they
search for competitive advantage, many airlines are making the
cabin configuration of their First and Business classes more and
more attractive. They are doing so by using new and costly seats,
and also by giving substantially more space to each passenger.
This in turn is forcing their rivals to match or exceed their
product specification. The result is what at the moment appears
to be a never-ending and fruitless search for competitive
advantage. One airline may establish such an advantage, but this
does not turn out to be sustainable. The very fact that customers
like its new cabin configuration forces its rivals to respond with
something equally or even more appealing in order to protect
their market share. The end result of a round of competitive
innovation in seating comfort standards is that market shares
remain the same, but all the airlines which have taken part in it
have significantly higher unit costs. The history of First Class
and Business Class cabin configurations illustrates this point
well. Today, a competitive long-haul First Class cabin will have
seats which fold down into horizontal beds. In order to
accommodate this, a seat pitch of around 70 inches will be
needed. In Business Class, a competitive seat pitch is now around
55 inches, an increase from the 38 or 40 inches typical of only
ten years ago. At the time of writing, there is a growing trend to
extend the flat-bed principle to Business as well as First Class. It
will be hard, though, to get a return on this investment,
particularly during times when a business slowdown reduces the
size of the Business Class market. In some cases, airlines have
opted out of at least some aspects of competition over cabin
service. In particular, many carriers have withdrawn from the
First Class market entirely and have instead put their faith in a
much-enhanced Business Class product. Air Canada, Aer Lingus,
KLM and Northwest are all examples of airlines which have
made this decision. They risk losing some of their highest-
yielding business, but have much greater freedom of action. In
particular, they can improve their Business Class so that it is
fully competitive with the highest standards, without the concern
that by doing so, they will be competing with their own First
Class market. Airlines that stay with First Class often find that by
improving their Business Class to keep up with market trends,
they succeed in persuading some of their own First Class
passengers that it is no longer worthwhile for them to pay the
First Class premium. On short-haul routes, questions of cabin
configuration and classes of service are rather different. On these
routes, almost all airlines outside of the U.S.A have given up
First Class, on the grounds that it has become harder and harder
to persuade passengers to pay the higher fares for sectors of only
an hour or so. In Europe Swissair and Lufthansa were the last
airlines to withdraw First Class, doing so in 1993. Instead, short-
haul flights now are usually based on a two-class cabin, divided
between Business and Economy seating.

Network, Frequencies and Timings

The planning of an airline’s schedule is again one where

compromise between product quality and cost will be needed.
There will also be many practical constraints which may mean
that the carrier’s freedom of action to meet the requirements of
its customers will be significantly affected. We saw in Section
2:3:3 that for business travellers, a broad network of direct flights
is central to their product requirements. These are the features
which will give them the flexibility they need. It will not be easy,
though, to decide on exactly what should and should not be
offered. In terms of the practical constraints, route entry
decisions are still often limited by government regulation of
market access. On international routes, it may still be necessary
for an airline to gain designation by the home government under
the terms of the relevant Air Services Agreement. Even if such
designation is obtained, decisions about capacities and
frequencies may also be constrained by regulatory factors. Many
Air Services Agreements are still written in a way which is
designed to ensure that airlines do not compete on capacity, with
equal amounts provided by airlines from each country. Airport
slot availability is an increasing number of cases a constraint on
route entry and scheduling as was discussed in Section 3:2:5. At
the moment, the industry bases slot allocation at congested
airports on the „Grandfather Rights‟ principle. Opportunities to
land and take off at particular times are retained by established
airlines on a more-or-less permanent basis, from one season to
the next. This can mean that there will be significant difficulties
for a new airline wishing to begin services at a congested airport
where all the attractively-timed slots will be in the possession of
incumbent airlines. Even if slots can be obtained to allow
services to begin, they may be at unsuitable times. It may also be
difficult to get sufficient slots to allow the frequencies of
established airlines to be matched. Environmental factors are
often another practical constraint. Many airports now impose
restrictions on the amount of night flying they allow, and some
ban it altogether. Whilst many airlines try to avoid
„dead-of night‟ arrivals and departures because of their
unpopularity with passengers and difficulties with airport access,
night flying is still a way for leisure orientated airlines to boost
aircraft utilisation and lower their unit costs. In terms of current
controversies regarding network and schedules planning, airlines
are having to make a number of difficult decisions, many of
which involve the familiar trade-off between costs and product
quality. On long-haul routes, a very clear passenger preference
has emerged in recent years. Passengers prefer non-stop flying to
flights involving intermediate stops. To meet this requirement,
aircraft manufacturers have responded by producing families of
aircraft with longer and longer ranges, and the opportunities
provided by such planes have been taken up by some airlines.
Many markets have now been transformed in terms of the ways
in which carriers serve them. For example, almost all services
between Southeast Asia and Europe, and Southeast Asia to the
West Coast of the USA are now non-stop, and any airline which
attempted to serve them with an intermediate stop would find
itself at a serious competitive disadvantage. The industry’s
appetite for longer range non-stop services still appears to be
significant.

Punctuality

Planning to ensure high standards of punctuality is a central

product issue for all airlines. It is true that some of the
punctuality problems being experienced by airlines at the present
time reflect outside factors such as airport and air traffic control
congestion. Still, many trade-offs exist where airlines that are
prepared to spend more may fare significantly better than those
which opt for the lowest possible costs of operation. In turn,
these carriers will have an important advantage in securing long-
term customer loyalty. An important first area for these trade-offs
is in airline fleet planning. Generally, an airline will obtain the
best punctuality performance if it operates new aircraft of proven
technology. This means that an airline seeking the best possible
punctuality performance should avoid being a launching
customer for a new aircraft containing significant amounts of
new technology. An especially difficult situation is when both
the airframe and systems and the aircraft engines are entirely
new. It will, though, lose opportunities to take advantage of the
attractive discounts manufacturers always offer to launching
customers. The airline should also have a policy of replacing
aircraft with new planes after a few years. Some airlines -
Singapore Airlines is an example - do so, and appear to gain
significant punctuality benefits from it. This is because aircraft
dispatch reliability tends to decline with the age of an aircraft
once a certain threshold has been passed. A further punctuality-
related decision is whether or not an airline should invest in the
automatic landing capability which will enable its aircraft to
operate in conditions of poor visibility. Heavy costs will be
associated with such a decision. Besides the capital costs of
buying the equipment and maintaining it, flight crew training
costs will also be significantly raised both in initial training and
also because of the regular opportunities which must be given for
crews to practice their blind landing skills. As a further difficulty,
it is an investment which for many airlines will be poorly
utilized. Few airports in the world have a problem with low
visibility for more than ten or fifteen days per year, meaning that
for almost all the time, a blind landing capability will not be
needed. Despite all these problems, investment in automatic
landing is now a necessity for many airlines. Customers now
realise that fog need not delay an aircraft unduly, and
competition has forced more and more carriers to make the
 required investment. Maintenance is another area where trade-
offs between cost levels and punctuality performance will need
to be made. An airline seeking to achieve the best possible
punctuality record will need a substantial line maintenance
capability, to ensure that technical problems can be corrected as
soon as they arise. Also, a considerable investment in spares will
be required, for the same reason. It is in the area of schedules
planning where the most significant trade-offs have to be made if
an airline is to achieve a good punctuality performance. A carrier
aiming at the lowest possible cost of operation will develop a
schedule which will give a high annual utilization of each aircraft
in the fleet. Such a policy will lower costs because it will result
in the fixed costs of aircraft ownership or lease rentals being
spread over the greatest quantity of output. Very high aircraft
utilization will, though, often bring significant product penalties.
It will result in some customers having to accept inconvenient
departure and arrival times, because high utilization will require
aircraft to be kept flying continuously except for essential
maintenance and turnaround periods.

CUSTOMER SERVICE AND CONTROLLING PRODUCT QUALITY-

AIR FREIGHT PRODUCT
In the fast-paced world of air freight operations, ensuring the
highest quality standards is paramount. Quality control serves as the
backbone of successful air freight management, safeguarding against
errors, delays, and potential mishaps. Let’s delve into the intricacies of
 quality control in the air freight industry and explore how it plays a
pivotal role in elevating excellence.

DEFINING QUALITY CONTROL IN AIR FREIGHT OPERATIONS

Quality control, in the context of air freight operations, refers to the
systematic processes and measures implemented to guarantee that each stage
of the freight journey adheres to predetermined standards. These standards
encompass various aspects, including safety, compliance, and efficiency.

THE SIGNIFICANCE OF QUALITY CONTROL IN AIR FREIGHT

The importance of quality control cannot be overstated. In an industry where
time sensitivity and precision are non-negotiable, effective quality control
safeguards against potential disruptions and ensures a smooth and reliable
freight experience. Now, let’s dissect the key components that constitute a
robust quality control framework.

KEY COMPONENTS OF QUALITY CONTROL

Inspection and Testing
One of the foundational pillars of quality control is rigorous inspection and
testing protocols. From the moment a shipment is received to its final
delivery, each step undergoes meticulous scrutiny to identify any deviations
from the established standards.

Documentation and Record-Keeping

Accurate and comprehensive documentation is essential for traceability and
accountability. Quality control involves maintaining meticulous records of
each shipment, facilitating transparency and aiding in the swift resolution of
any discrepancies.
Compliance with Regulations
Adherence to international and local regulations is non-negotiable in air
freight. Quality control ensures that every aspect of the operation complies
with the ever-evolving legal landscape, mitigating the risk of legal
complications.

Technology’s Role in Quality Control

In the era of digital transformation, technology plays a pivotal role in
enhancing quality control measures within air freight operations.

Automation in Freight Operations

Automated systems streamline processes, reducing the likelihood of errors
caused by manual intervention. From sorting packages to managing
inventory, automation contributes significantly to operational efficiency.

Tracking and Monitoring Systems

Real-time tracking and monitoring systems provide unparalleled visibility
into the freight journey. This not only enhances security but also enables
proactive problem-solving in the event of deviations from the planned route
or schedule.

Data Analysis for Continuous Improvement

Harnessing the power of data analytics allows for continuous improvement.
By analyzing performance metrics, air freight companies can identify trends,
address recurring issues, and optimize their operations for maximum
efficiency.

CHALLENGES IN QUALITY CONTROL

Despite the advancements in technology and meticulous planning, challenges
in quality control persist.
External Factors
External factors, such as adverse weather conditions or customs delays, pose
a constant challenge. Quality control measures must be flexible enough to
accommodate unforeseen circumstances.
Communication and Coordination Issues
Effective communication and coordination among various stakeholders,
including airlines, ground handlers, and customs authorities, are essential.
Breakdowns in communication can lead to errors and delays.
Human Error
As with any industry, human error remains a potential pitfall. Quality control
strategies must account for the possibility of mistakes and implement
safeguards to minimize their impact.

STRATEGIES FOR EFFECTIVE QUALITY CONTROL

Addressing the challenges requires proactive strategies that go beyond
technology.
Training and Skill Development
Investing in the training and skill development of personnel is crucial. Well-
trained staff are better equipped to handle unexpected challenges and adhere
to established protocols.
Collaboration and Communication Enhancement
Facilitating seamless collaboration and communication between all parties
involved fosters a cohesive and efficient operation. Regular training sessions
and joint exercises can enhance coordination.

What is an Airline Alliance?

On the most basic level, an airline alliance is an agreement

between many airlines to work together to share flying routes and
resources, and extend reciprocal benefits to one another’s
frequent fliers.

An airline alliance is an aviation industry arrangement between

two or more airlines agreeing to cooperate on a substantial level.
Alliances may provide marketing branding to facilitate travellers
making inter-airline codeshare connections within countries.
This branding may involve unified aircraft liveries of member
aircraft.

Benefits

Airline alliances have several benefits for both the airlines and
passengers. By working with other airlines, an airline can expand
its route network to be much larger than what would exist with
any one airline. hen things go wrong, an airline that’s part of an
alliance has more options; for example if you miss your
connecting flight on United, you could be put on the next flight
operated by any of their alliance partners that gets you where you
need to go.
Airline alliances also allow bag interlining (you can check your
bag with Delta and it’ll be checked through to your connecting
flight with Air France, for example), and they allow you to use
your points accumulated on one airline to travel on an allied
airline. Plus, you'll still earn miles with your airline of choice.
Finally, you'll have access to other airlines' lounges. For
example, one world elite members have access to over 650
airport lounges around the world.
Benefits can consist of an extended network, often realised
through codeshare agreements. Many alliances started as only
codeshare networks. Cost reductions come from the sharing of
sales offices, maintenance facilities, operational facilities (e.g.
catering or computer systems), operational staff (e.g. ground
handling personnel, at check-in and boarding desks), investments
and purchases (e.g. in order to negotiate extra volume discounts).
Traveller benefits can include lower prices due to lowered
operational costs for a given route, more departure times to
choose from on a given route, more destinations within easy
reach, shorter travel times as a result of optimised transfers, a
wider range of airport lounges shared with alliance members, fast
track access on all alliance members if having frequent flyer
status, faster mileage rewards by earning miles for a single
account on several different carriers, round-the-world tickets,
enabling travellers to fly over the world for a relatively low price.