Services In The Airlines Industry

Summary

The airline industry is emerging due to the new competitors in the travel sector. In the past it was protected through government controls until the early 1980's. However due to deregulation, the industry opened to free competition. As a result, collaborations and alliances were formed and low budget airlines like Ryanair and easyjet were able to enter the market.

The purpose of my report is to present the current competitor analysis of the European Airline Industry, the positioning criteria used by both British Airways and Ryanair and how each airline has developed their brand.

I chose to look at Ryanair as a low budget airline and British Airways as a leader on the airline industry. My report was based on several information found in financial newspapers (The Economist, Financial Times etc.), from the internet (www.ryanair.com, www.britishairways.com and infotrac...) and independent analyst reports.

My findings where strategies used by British Airways and Ryanair differ a lot because Ryanair focuses on low costs and British Airways focuses on high quality service and strong brand. I also found that British Airways has a complicated situation in a weak industry as it has to make many strategic adjustments. Its diverse choice of prices and services underlines its current stability.

Finally the development of British Airways and Ryanair brands was looked at in grave detail, giving a detailed examination on how they both use their different strategies to develop their brand, one based on low fares and the other on quality.

From this project I have learned a lot about the European Airline industry and Service Marketing and especially how to develop and position a brand in order to help the consumer to choose a brand.

Introduction

"An important aspect of developing a market position is the development of a brand image which concisely states and reinforces the adopted market position" Adrian Palmer (2001), Principles of Services Marketing, third edition, McGraw Hill, London p176.

The emergence of active consumers those who are better connected and informed and have access to an increasing array of choices represents a challenge for many industries, especially the travel sector.

Travellers are increasingly exposed to a multitude of brands and options when making their travel decisions. At the same time, travellers' brand awareness has been complicated by increased industry mergers, acquisitions, and alliance activity. These developments represent a significant opportunity for companies with strong brands.

Today, the services play an important role in order to develop the brand and to help direct travellers' decision making

With the globalisation of the trade, a company like British Airways must adopt a international strategy in order to develop his business and to be face up about the new competitors like easyjet and ryanair.

Throughout this report I will be looking at the European airline industry in grave detail bearing the above statement in mind at all times.

The main body of the report will cover the following three aspects:

 Competitor Analysis of the Airline industry.

 Positioning Criteria used by both Ryanair and British Airways

 How Ryanair and British Airways has developed its brand.

* Competitor Analysis

Competitor Analysis involved looking at the European airline industry as a whole market and analysis how competitive the market is especially the low frill airlines like Ryanair, Easyjet, and Virgin Express compete against themselves and the more expensive flight companies like British Airways, Air France, Air Italia and SAS compete for the business traveller and the traveller who seeks the added value.

* Positioning Criteria

Positioning Criteria is the second main body of the report and looks at how British Airways and Ryanair position their companies. This section deals with how both companies distinguish their services from one another especially to gain a competitive advantage within the airline market. In this section I wanted to show that positioning is more than merely advertising and promotion but involves considerations of pricing distribution and the nature of the product offer itself.

* How Ryanair and British Airways developed its brands?

How Ryanair and British Airways developed its brands?

In the third section of the report I showed how Ryanair and British Airways develop their brand as it is one of the most important guides for its consumers when choosing between similar airline services. Although brands are frequently used by companies to provide evidence of consistent standards and are particularly important when a company has no opportunity to develop an on going relationship with its customers. I also found that Michael O'Leary sees none of these factors as important but to merely provide an A to B service with all clients treated equally and no extras given whatsoever and this type of service has seen Ryanair prosper into a multi million profitable airline companies.

Competitor Analysis of the Airline Industry

On the whole the airline industry is a service industry (Dibb and Simpkin 2001). In the past airlines where primarily concerned with customer service and looked to add value to the customers experience at different stages of the value chain (Report on Easyjet and the no frills airline market), but nowadays due to great competition and diversification in the airline industry many companies have opted for the no frills approach like Easyjet and Ryanair which offer you a seat from A to B with no extras. Although the low cost airline sector has doubled in the last 4 years to carry 10 million passengers, the