Air Tran Revisado
Content
MISSION “Innovative people dedicated to delivering the best flying experience to smart travelers. Every day.”
VALUES Safety—in every decision and every action, every time, every day. Courtesy
Teamwork
Pride
Innovation Service
HUMAN RESOURCES Robert Fornaro Chairman Stephen Kolski Operations and
President & Chief Executive Officer Executive Vice President,
Corporate Affairs Arne Haak Officer
Senior Vice President of Finance, Treasurer and Chief Financial
SWOT Strengths – S New planes consume 24% less • fuel than old planes • Has remained profitable despite airline conditions • Business class on all flights • Additional seating in place of galley / no meals are served Average age of planes is 2.5 • years
Weaknesses – W Only domestic flights offered. • • Primarily east coast flights. • Among lowest rated for “ on time ” performance • Heavy reliance on Atlanta, Georgia Net income dropped from 100.5 • million to 12.3 million (20032005 respectively)
Opportunities – O • Appeal to public due to new, “ safe ” , planes. • International Expansion. Domestic Expansion. • • Allow for computer reservations. • Negotiations between United States and Mexico / possibly more flights to Mexico
SO Strategies Expand more flights to west • coast / Mexico (S1, O3, O5) • Advertise business class to firms throughout the country (S3, O3) Advertise the number of • available seats to all of North America (S4, O3, O5)
WO Strategies Expand domestically / West Coast • and Mexico (W1, W2, W4, O3, O5) • Create another main hub other than in southeast (W2, W4, O3) Create cost efficient computer • reservation system (W5, O4)
Threats – T • Unionized workers / possible strikes. • Rising Fuel Costs Major competitors in same • market. • Society ’s view of flying after September 11 Eastern / Southeastern weather •
ST Strategies • Advertise shared cost savings due to fuel-efficient planes (S1, T2) • Advertise new, “ safe ” planes (S5, O4) Expand short haul flights / • business class on west coast (S3,
AirTran Airways SWOT Matrix
WT Strategies Expand domestically (W1, W2, • W4, T3, T5) • Relocate main hub (W4, T3, T5)
CUSTOMER VALUE PROPOSITION
• AirTran reward program • 700 daily flights • 57 destinations • Low Cost quality • Service Oriented • Response time • Real time desision response
AirTran’s strategy is one of low cost within a narrow geographic area Atributes
Competition
Low-cost , wide emphasis on cost controls High labor productivity High asset utilization. - 2aircraft types - 86 Boeing 717 - A new fleet of 50 Boeing 737
- 2 new aircrafts - Cost advantage
- 1 old aircraft - Cost advantage
STRATEGY PROPOSAL
INCOME STRATEGIES Auxiliary products and services
Grow Client Value
•
Optional fees for advance seat asigment
•
Diffetentiaition Strategy
•
Call center fees
•
Web service
•
Pet fee
•
Alcoholic drinks
•
Free Xm Radio
•
Excess baggage
•
Wifi availability in every flight
•
Unaccompained minors
•
Premium beverages and food (paid)
•
Service quality
2005 revenue = 77 million dollar
STRATEGY PROPOSAL
PRODUCTIVITY STRATEGIES Market Penetration Go after Dell, Southwest, and US Airways market share
Market Development Concentrate on major vacationers, cooperate company trips, tourists destinations with the help of package deals (hotels plus flights) ect.
Joint Venture Join with already established flight services in the West and then gain more presence in the area.
PROPOSED ANNUAL OBJECTIVES •
Continue rapid growth
–
Bidding on gates that become available at current hubs
–
Expand into new hubs
•
Increase revenues
– • –
25% per year Increase efficiency
Cut expenses wherever possible while abiding by AirTran’s beliefs and values (culture of company)
– Maximize passengers per flight
OPERATIONS COSTS ANALYSIS
Great revenue
• Fuel is incrementing • Delta, Continental, U.S. airways, Northwest, & United declare bankrupcy • Some other stop operation
• Market Share
CONCLUSION Local Expansion •
Purchase more fuel efficient planes which will increase the number of NonStop flights
•
Increase the number of promotions, and packages to new markets.
International Expansion •
Purchase fuel efficient planes to travel international
•
Create contracts with international airports to allow Air Tran to land at their airport. As a new venture, Air Tran should expand to South America, Caribbean, Europe, then further international destinations will be established after Air Tran is stable in the international market
•
Establish connections with international tourist destinations, and create promotional travel packages to introduce the new destinations that Air Tran will help promote the new services that Air Tran will be providing
CONCLUSION Advertising for Business’s •
Establish contracts with various businesses to optimize the use of Air Tran for their various business related tasks such as business trips, shipping etc.
•
Set up a plan with business’s that would give them discounts on tickets if they have all their employees fly with Air Tran
The end
…
DIFFERENTIATION How its different?
LOW COST
• • • •
Business class en every airplane Hube and spoke system Student travel program Free Kraft snacks
STRATEGY PROPOSAL
SERVICE QUALITY Quality Comparison 2008 Vs. 2007 14
12
12
10
10
e l t i T s i x A
8
6
6 4 2
2
3 1
3
2
0 Airtran
Delta
JetBlue
Southwest
Direct Competition
MARKET SHARE American has the highest domestic market share (14.3%), followed by Southwest (13.0 percent),Delta (10.8 percent), JetBlue (4.3 percent), and AirTran (3.3 percent).
DESTINATIONS
VALUES Safety—in every decision and every action, every time, every day. Courtesy
Teamwork
Pride
Innovation Service
HUMAN RESOURCES Robert Fornaro Chairman Stephen Kolski Operations and
President & Chief Executive Officer Executive Vice President,
Corporate Affairs Arne Haak Officer
Senior Vice President of Finance, Treasurer and Chief Financial
SWOT Strengths – S New planes consume 24% less • fuel than old planes • Has remained profitable despite airline conditions • Business class on all flights • Additional seating in place of galley / no meals are served Average age of planes is 2.5 • years
Weaknesses – W Only domestic flights offered. • • Primarily east coast flights. • Among lowest rated for “ on time ” performance • Heavy reliance on Atlanta, Georgia Net income dropped from 100.5 • million to 12.3 million (20032005 respectively)
Opportunities – O • Appeal to public due to new, “ safe ” , planes. • International Expansion. Domestic Expansion. • • Allow for computer reservations. • Negotiations between United States and Mexico / possibly more flights to Mexico
SO Strategies Expand more flights to west • coast / Mexico (S1, O3, O5) • Advertise business class to firms throughout the country (S3, O3) Advertise the number of • available seats to all of North America (S4, O3, O5)
WO Strategies Expand domestically / West Coast • and Mexico (W1, W2, W4, O3, O5) • Create another main hub other than in southeast (W2, W4, O3) Create cost efficient computer • reservation system (W5, O4)
Threats – T • Unionized workers / possible strikes. • Rising Fuel Costs Major competitors in same • market. • Society ’s view of flying after September 11 Eastern / Southeastern weather •
ST Strategies • Advertise shared cost savings due to fuel-efficient planes (S1, T2) • Advertise new, “ safe ” planes (S5, O4) Expand short haul flights / • business class on west coast (S3,
AirTran Airways SWOT Matrix
WT Strategies Expand domestically (W1, W2, • W4, T3, T5) • Relocate main hub (W4, T3, T5)
CUSTOMER VALUE PROPOSITION
• AirTran reward program • 700 daily flights • 57 destinations • Low Cost quality • Service Oriented • Response time • Real time desision response
AirTran’s strategy is one of low cost within a narrow geographic area Atributes
Competition
Low-cost , wide emphasis on cost controls High labor productivity High asset utilization. - 2aircraft types - 86 Boeing 717 - A new fleet of 50 Boeing 737
- 2 new aircrafts - Cost advantage
- 1 old aircraft - Cost advantage
STRATEGY PROPOSAL
INCOME STRATEGIES Auxiliary products and services
Grow Client Value
•
Optional fees for advance seat asigment
•
Diffetentiaition Strategy
•
Call center fees
•
Web service
•
Pet fee
•
Alcoholic drinks
•
Free Xm Radio
•
Excess baggage
•
Wifi availability in every flight
•
Unaccompained minors
•
Premium beverages and food (paid)
•
Service quality
2005 revenue = 77 million dollar
STRATEGY PROPOSAL
PRODUCTIVITY STRATEGIES Market Penetration Go after Dell, Southwest, and US Airways market share
Market Development Concentrate on major vacationers, cooperate company trips, tourists destinations with the help of package deals (hotels plus flights) ect.
Joint Venture Join with already established flight services in the West and then gain more presence in the area.
PROPOSED ANNUAL OBJECTIVES •
Continue rapid growth
–
Bidding on gates that become available at current hubs
–
Expand into new hubs
•
Increase revenues
– • –
25% per year Increase efficiency
Cut expenses wherever possible while abiding by AirTran’s beliefs and values (culture of company)
– Maximize passengers per flight
OPERATIONS COSTS ANALYSIS
Great revenue
• Fuel is incrementing • Delta, Continental, U.S. airways, Northwest, & United declare bankrupcy • Some other stop operation
• Market Share
CONCLUSION Local Expansion •
Purchase more fuel efficient planes which will increase the number of NonStop flights
•
Increase the number of promotions, and packages to new markets.
International Expansion •
Purchase fuel efficient planes to travel international
•
Create contracts with international airports to allow Air Tran to land at their airport. As a new venture, Air Tran should expand to South America, Caribbean, Europe, then further international destinations will be established after Air Tran is stable in the international market
•
Establish connections with international tourist destinations, and create promotional travel packages to introduce the new destinations that Air Tran will help promote the new services that Air Tran will be providing
CONCLUSION Advertising for Business’s •
Establish contracts with various businesses to optimize the use of Air Tran for their various business related tasks such as business trips, shipping etc.
•
Set up a plan with business’s that would give them discounts on tickets if they have all their employees fly with Air Tran
The end
…
DIFFERENTIATION How its different?
LOW COST
• • • •
Business class en every airplane Hube and spoke system Student travel program Free Kraft snacks
STRATEGY PROPOSAL
SERVICE QUALITY Quality Comparison 2008 Vs. 2007 14
12
12
10
10
e l t i T s i x A
8
6
6 4 2
2
3 1
3
2
0 Airtran
Delta
JetBlue
Southwest
Direct Competition
MARKET SHARE American has the highest domestic market share (14.3%), followed by Southwest (13.0 percent),Delta (10.8 percent), JetBlue (4.3 percent), and AirTran (3.3 percent).
DESTINATIONS
