Stategic Plan for Alaska Air Group Inc. to be Competitive Against Low Cost Carriers
Alaska Air Group Inc., consisting of Alaska Air and Horizon Air collectively serves the passengers up to 90 destinations, providing award winning service and the best deals for customers on almost all routes. The Alaska Air Group Inc. is distinguished by its cost-effective, high-ranking and modern actions, and combines the business leading know-how of the companies united within it. The solid body of the Alaska Air Group Inc. is formed by its integrated trademark. The main aim of the company is to expand one economically healthy basis, and by personal efforts. These will combine the efforts of the executive board, staff and customer recommendations.
However, more and more, low-cost carriers are bringing their own rules in to the market. Newcomers in business provide new options, routes, and fleet to the clients, mostly by introducing competitive prices. In most cases it is done by limiting the baggage allowance and bringing up considerate fees. Also the shortage on board services and providing only limited possibilities for entertaining for passengers of high ranking airlines are introduced. Surely these factors could bring down the passengers rates and income of the companies, but surprisingly they do not. Customers are willing to get less service for less money. Hence, the experienced airlines companies have to provide luxury service for its customers in order to be chosen. It is obvious that it increases the price for the ticket. Due to this issue airline companies have to find a way to shorten their expenses on everything except service, which is expected to be upgraded every year.
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Alaska Air Group Inc. has to correlate with the passengers demands and the possibilities of the airline budget. A strategic plan has to be implemented in order to reach all the goals and become competitive airline.
Strategy and Implementation
Large scale carriers are distinguished from the low-cost carriers by their route map. Low-cost ones decrease the fuel surcharges and airport taxes operate flights mainly on short-haul destinations. In this way they can propose a good price for their passengers, not increasing the costs inputs from the airline side. Also the low-cost carriers do not have the possibilities to extend their rout map by the code shares agreements, because they use their aircraft only for loading with the passengers that bought tickets directly from them. Airlines contributing to any bigger airline alliance can extend the number of passengers and their route maps by the code-shares. This is a great possibility to provide their customers with new destinations without investing in to new aircrafts or opening new hubs. As Alaska Air Group Inc. is not a part of any of the three major airline alliances, an efficient increase in all fields of the airline in case of extension it would join one of them. Only providence of some code-share flights with Delta or Air France cannot propose all the benefits of being a part of an alliance. The flight network could be extended, together with the beneficial mileage programs and insurance programs considering involuntary situations could be introduced. As any of the low-cost carries do not have any alliance agreement this step would bring Alaska Air Group Inc. to a new level of the airline business.
Mostly, low-cost airlines do not provide connections to the biggest and central airports. They select the distant one, which have the smallest airline fees and not many high-ranking carries. Using the code-shares agreements and also its own route map, Alaska Air Group Inc. can provide access to the best tourist destination points, which can be offered to the passengers by special fares, depending on the season. A hub like Seattle, almost at the border with Canada, allows creating a good route basis to the neighbour country. Extending the route map with the help of code shares or partners would be a great step forwards. Considerably close distance can provide cost effective and short-haul connections to Canadian friends.
Low-cost carriers are having mainly fixed prices, which are depended on the availability and cannot make take any advantage from the season. On the one hand, having fixed flights routes and fixed pricing policy may seem as an advantage for those who do not use airline connections often.
The crucial essence of the fares and pricing policy on airlines, mainly have set its place in the air industry. Offering the customer promotions, special routes or connections based fares is almost day-to-day routine. On the other hand, offering to the passenger a possibility to implement benefits by themselves is considered as a self-murder. However, people do not know what they want, till they experience it. It is a tricky area where the prediction is almost impossible to set up. Nevertheless, making business friendlier and available for middle class people will make the airlines used by everyone. Therefore, it is important to making clear, sociable plan for the managers and for the customers.
Such changes can be implemented by the new packaging policy, which would be created based on the customers survey and on the revenue that can be done on it. Everyone is willing to pay for the package that combines all the needed facilities into one and is guaranteed by numerous travel agencies . Packages proposed by the airline would include the flight connection, the hotel arrangements and also the guide. Creating a trip to Alaska with Alaska Air, this is the best service solution. Starting the journey with the carries that provide everything needed on board and afterwards, together with his partners, it takes care about the holiday and brings the customer back home safely. It is a perfect deal taken without any extra effort. Moreover, there is no need of giving extra costs out on travel insurance, as everything is already included. If the hotel needs to refuse to the passenger on some force major circumstances, or the flight has to be cancelled, no numerous phones has to be done, besides arguing with different organisations can be excluded as well. The customer can be easily brought home, compensation, partial or full refund can be organized at one service desk. This is something that a low-cost carries cannot afford, as the cheap fares, do not allow a high performance like that. Everything must be limited to some extent. The prime concentration would be done on the week-days fares, combined specially for the business people, who need to go back and forward during the working week. The weekend propositions would be linked with the packages proposals in order to increase the interest of the customers that want to make a city break. Also a gambling trick would be implemented. It will be based on a proposition to by a chain of tickets on the same route (which is applicable to the family visitors or contractors) and depending on the amount given for those tickets one can get a discount on package trip or flight to Hawaii islands.
The competition with the low-cost carriers also can be limited by the implementation of the interactive products that can be offered to customers. Low-cost's consider this a big and unnecessary whole in the budget, but the demand for such services is increasing with every t year. Upgrading the customer experience, using the text, mobile and APP services will update the PR of Alaska Air Group Inc. Managing this field will make a lot of services available to the customer any time he wants to. Providing with the notification, verification of the personal information on personal phones creates a good image to any business.
All the new strategies would need a financial support from the new investors and other successful companies. To achieve this, an on-board entertainment can be linked with other companies, thus the drinks and other beverages can be served with a discount. Screening of the moves and TV-programs can be also commercialised. Moreover, such additional services as giving out the daily journals, different information sheets will be provided. They will contain interesting information about the commercial partner. The investment will help to keep the budget in good terms and will make some experiments on the market; without investment there is no possibility of profit for the airline. Trying to gain the profit only from the passenger transportation and providence of benefits or different incentives will not help to remain competitive on the market. Moreover, big companies always organize major events, on which the airline can become the accredited carrier for the passengers who register for it. If they managed to register, they also can get a discount on the ticket price, by receiving a voucher from the company. Joined workspace would be a great success for both parties.
The road to a healthy, competitive and perfectly-structured airline starts with the good trained, educated and loyal staff. All the above mentioned improvement cannot be brought in to life, without people who can implement them in to daily work-surface. It depends on the people who provide the services to the customers, serve them, and propose the quick solutions for their requests. In such case the improvement will be obvious. Unfortunately, any good product that is advertised to the public without any excitement and professionalism is doomed to fail.
Considering the fact that during the last years Alaska Air Group Inc had a lot of job shortages and the employee rate was decreased certain changes should be done. The personnel that has remained loyal and that has accompanied the airline business has to be reworded and protected from moving to the other carries. Moreover, the customers always cherish people that they have got acquainted with and it does not matter on the position of this person whether it is customer support, steward, or serving personnel.
After the implementation of mentioned improvement there will not exist a question of competition with the low-cost carries, because they are competitive for the airline that provides the best service in every area of their business. Low-cost's will always try to shorten expenses on everything. Alaska Air Group Inc. will only cut down the priced on the unnecessary things and will live up services. A well-organized airline is different from the low fare market, because their customers are willing to receive the comfort they deserve and do not want to refuse from the benefits they can receive on their trip. The main goal of Alaska Air Group Inc. is to be better than low-cost carriers because of excellent services they can provide their customers with, not decreasing the prices of tickets.