Flights & Fights

In the video Flights and Fights: Inside the Low Cost Airlines, we recognized the main themes of two airlines, Ryanair and EasyJet. Low costs, low fares and efficiency served as the base for daily operations through means of tactful branding, setting the ignition price, and forecasting for targets.

Stelios, EasyJet’s biggest shareholder found that by utilizing the pantone 02iC orange color on their Airbus would attract and secure its mark in the airline industry. His idea of selling tickets, cutting out commission of the traveling agent, and cutting out all the accounting tickets would save the airlines 20% B., & F. (2013).

O’Leary focused on running a low-cost airline by setting the ignition price for Ryanair to be reasonable while still allowing for air travel room for a 6-pound passenger profit. His core marketing strategy was to spend as little funds as possible for advertising by keeping majority in house and relying on lots of free publicity B., & F. (2013).

Reducing costs and increasing profits were the motives for both airline companies, Ryanair and EasyJet. What set the two apart wasn’t much. Focusing enplanements at airports that were smaller and out of the way was Ryan Air’s approach. Catering to such airports made the airlines mores competitive and profitable. A method Ryan Air used to turn a cost into a profit was a local orange juice company that paid the airlines to be featured and served on flights to passengers.

We have seen how low cost airlines have revolutionized the way we fly. Low cost airlines bring business, jobs, and boosts the economy. Sticking to the formula of no assigned seats, snacks only, more flights and cheap fares can look simple. None of this could be possible without the proper techniques and implementation of economic order quantity and Just-in-Time inventory management.

A key balance between shortage costs, holding costs, and ordering costs can better regulate airlines budgeting process and price that determines the demand Hilton, R. W., & Platt, D. E. (2016). Keeping ahead in inventories for fuel, plane tires, de-icing solutions, snacks, aircraft, etc. can all benefit a sound inventory policy. Knowing when to order, keep safety stock, or even placing prompt orders to avoid stock outs can all minimize cost resulting in reduced costs and increased profits Hilton, R. W., & Platt, D. E. (2016).

Operating a low fares airline can be challenging yet rewarding. Like EasyJet and Ryan Air, your airlines too can have an efficient system to guarantee a quick turnaround and reap profit.

Resources:

E. (2017). EasyJet. Retrieved April 7, 2017, from https://www.easyjet.com/en/Hilton, R. W., & Platt, D. E. (2016). Managerial Accounting Creating Value in a Dynamic Business Environment (11th ed.). New York, NY: McGraw-Hill College

B., & F. (2013). Flights and Fights: Inside the Low Cost Airlines. Retrieved April 7, 2017, from https://erau.instructure.com/courses/60672/pages/3-dot-2-video-flights-and-fights