Case Study: Crowair PLC

Crowair Plc is a low cost airline operating short routes serving UK regional airports across Europe. the company’s aim is to keep costs low by offering a more basic service than other airlines, the company has decided to expand its services.

The company decides to go through a 3 step process so as to achieve this objective: Planning, Decision Making & Control.

Planning

Planning is a process that involves setting goals, creating strategies, and outlining tasks and schedules to achieve the goals. The success of any business depends on the accuracy of the action-plan set. The planning process involves:

• Identifying objectives:

1. Crowair Plc aims to lower costs by offering a basic level of services.

2. Like any business Crowair plc also would

The distance is 333miles and in flight time it is one hour fifteen minutes. Price per person is £50 and an extra £20 per kilo of baggage

 London and Paris

Crowair does not offer any flights to Paris. Distance to the proposed route is 212miles and flight time is one hour fifteen minutes. Price per person is £60 and an extra £20 per kilo of baggage.

Information on competitors:

Competitor analysis in management is an assessment of the strengths and weaknesses of competitors. This analysis provides a strategic context to identify opportunities and threats. Crowair Plc has three close competitors:

1. British airways

2. Easy jet

3. Klm

Competitor profiling provides knowledge of rivals and offers a source of competitive advantage.

The table below shows the prices charged by the competitors (one-way)

Airlines London to Edinburgh London to paris

British Airways £70 £170

Easy Jet £65 £60

Klm £100 £85

Based on price profiling Crowair Plc. must price its service equivalent to or below that of the competitors so as to gain a pricing advantage.

Information about costs:

Table of fixed costs

Crew member salaries Aircraft

For accurate decision making, the decision maker must be able to predict the outcome of each option and set out the pros and cons and based on all these factors, determine the best option.

• Select alternative/decision making:

After analysis of the alternatives Crowair Plc. is recommended to select the alternative that provides the service from London to Paris. But why choose service between London to Paris?

1. There is already a flight service between London and edinbrugh so it is beneficial for crowair plc to expand its services to other places.

2. Extending operation to paris will increase customer base, Customer Satisfaction and thereby increase reputation.

3. This will help crowair to further level up with its competitors

4. An approximate of 55% travel to paris from London every year. So statistically it will be more profitable for Crowair Plc. to open new routes thereby providing a diversified revenue stream.

5. Considering Crowair plc is a low cost airline the expansion to paris will be relatively cheap as the management will try its best to reduces costs plus there is no additional investment as an existing flight is being