They are paying their money in returns to require a good quality of service by airline industry. Meanwhile, service failure is more depend on how the perception of the customers and is not just consistently with service provider perception of service failure. One thing that the organization needs to aware is the service failure will not only affect the customer loyalty or confidence but it will also
Another factor is the amount of consumers that purchase airline tickets came from middle class income. Due to individual earning, they will tend to choose airlines that offer cheap and affordable ticket fees compared the one who sell it in expensive and indirectly it will lead to high bargaining power of buyers. Next, nowadays with the advancement of technology and social media make the consumers easily to access the current information regarding the tickets, package, promotion, discounts and others from airlines. They will keep getting the notification and will be alert regarding the airlines. Of course the power of buyer will be
The value of this order exceeded €6bn. and signaled Ryanair’s ambition to continue to be the largest low fares airline in Europe as well as the lowest fare airline in Europe. Ryanair became No.1 in Europe of customer service beating all other European airlines for punctuality, fewer cancellations and least lost bags. Rapid expansion of Ryanair right across Europe continued. In 2003 the airline acquired Buzz, the Stansted based loss making airline from KLM in April, which they closed for a month and then re-launched on 13 former Buzz routes in May at half the fares previously charged by Buzz.
However, when one airline serving a particular route cut its prices, its competitors, desperate to cover their fixed costs, quickly followed. This “price competition war” among the aviation industry enable consumers can switching to any airline companies whose offer the cheapest price. This is because consumers at that period is more concern about cost driven rather than the quality and services after the September 11 attacks. This shows low profitability as US airlines is compete more for business due to downfall of economy, by cutting down fare to attract customers and add services at lower costs to lure people into using their
They can increase expenditure by advertising more or by executing promotions. Therefore existing airlines would innovate in order to maintain or increase their market share, such as encouraging loyalty by providing perks such as frequent flyer miles. Examples of positive reactions are such as: Mango airlines increasing their advertising expenditure in order to increase their market share Negatively: Whereby entities reduce their expenditure, airlines may reduce advertising and other operating expenses to become more efficient in order to reduce their prices in order to maintain or gain market share. The aviation industry requires huge amounts of capital, it’s for this reason that Velvet sky initially only had one leased plane. Knowing this, firms may try to restrict velvet sky from obtaining a market share by reducing prices and innovating ways in which to persuade customers to remain or join them.
We also suggest that the company must work on developing its aircraft, renewing them a little bit, and working on clearing some problems such as seat comfort and cleanliness. Ryanair is very popular in europe due to its low prices, however companies should sell value also not price, and should persuade customers a higher price for the company’s brand is justified by the greater value they gain. Low prices is not always the solution, customers also search for added value in order to satisfy their needs and wants, ryanair try to work solely on promoting its low prices and on the other hand the company charges its customer extra fees on any other additional service rather than their ticket such as baggage fees, for example it eliminated its free checked-bag allowance and began charging 3.50$ per piece, infant fees, special assistance fees, priority boarding fees, name change fees, these basic services are offered free of charge by airlines all over the world, however ryanair can justify these fees by offering a very low ticket price compared to other airlines, but the problem is that sometimes customers feel that they are paying the money they saved by purchasing ryanair’s ticket on these fees, so they feel that it is the same as buying from other airlines, but that is not alway the case. An airline such as RYANAIR with all of its success must work harder on improving its SERQUAL model and to increase its Reliability, Responsiveness, Empathy, Assurance, and
Customer loyalty is the output of its satisfaction and largely influenced by the value of service provided to customers. The price of the merchandise/service purchased is psychologically lessened when the value of the product is greater than the price based on customer’s perception. Value is created by satisfied loyal and productive employee that is why the success of attracting customers depends on what the organization do (Dase and Chase, 2013). Also, David Weaver (2010) revealed that lack of trust can increase a customer’s anxiety and renders the experience unpleasant for the provider and the customer. Many have tried and develop strategies in developing a customer trust and some principles which a firm could do to enhance the trust.
Indian airline industry has been growing at a rapid pace, as reflected by the increase in traffic over the years. There has been a significant increase in passenger traffic of 12.47% compared to the last year and a compounded annual growth rate in freight traffic of 8.23% and 6.7% over FY’2006-15 for domestic and international traffic respectively. Though the aviation industry has been experiencing a financial crunch due to decreasing airline prices, the decrease in fuel prices in FY’15-16 has come as a timely boost for the industry, and the results are getting reflected in the financial statements of the airline companies. In this report, we will look at one of the more prominent players of the current Indian airline industry- A player
In addition, the availability of information is really high and with the emergence of travel portals who guarantee that they can search for the lowest fares out of all the options available and book it for the client with just a click which even provides the ease of purchase, the bargaining power of the buyer is increasing Frequent flyer programme and online duty free purchase services can create customer loyalty and reduce the threat of customer switching over to other airlines to some extent. Low buyer concentration can also reduce the power of buyers. Competitive Rivalry (High
In the same time, our company is moving towards a performance management system as other organization. Hence, I recommend new strategy that call “new world” strategy. Since our company is doing on low-cost airfare and high quality facilities to make passengers satisfy and also increase the popularization of status. Our company also makes available a service which can provide customer to make privilege card at our company in order to collect privilege points to redeem the flight ticket in the following flight booking. While customer needs to get this free privilege card they need to purchase our company airfare RM300 above.