Marketing Analysis : Forging A New Horizon Of Traveling, Allegiant Travel Company

The article was reported in the National Geographic Traveler Magazine in the December 2012/January 2013 issue. Christopher writes about two separate airlines and the potential of what could make or break a person. He used different points to breakdown what airline companies are doing to the economy. He published the article to make people become more conscious thinkers and look at the entire package/company when it comes the cost of booking with an airline. Let’s look at how the customer service, expenses and hospitality play a factor when choosing an airline. The Good versus the Evil in the air.

To evaluate the external environment of JetBlue airways we will use the PESTEL analysis. PESTEL analysis stands for “Political, Economic, Social, Technological, Environment and Legal analysis”.

The airline industry has long attempted to segment the air travel market in order to effectively target its constituents. The classic airline model consists of First Class, Business Class and Economy, and the demographics that make up the classes have both similarities and differences to the other classes. For instance there may be similarities between business class travellers on a particular flight, but they will not all be travelling for the same reason. An almost-universal characteristic of air travel is that customers do not fly for the sake of flying; the destination is the important element and the travel is a by-product, a means-to-an-end that involves the necessity of an aircraft that gets the customer from point A to point B.

The airline business is an industry that is competitive and unique, focussing on consumer choice and the responsiveness of airlines to changes in the external business environment. For any airline, this environment can be very complex as it is ‘hard for them to fully understand and impossible for them to fully control’ (The Times, n.d. p1). Virgin Atlantic is an international airline that is based in the UK. It was started by the entrepreneur Richard Branson in 1982 and now flies to 30 destinations around the world (Virgin Atlantic Airways Ltd, 2011). By looking at

American airline industry is steadily growing at an extremely strong rate. This growth comes with a number economic and social advantage. This contributes a great deal to the international inventory. The US airline industry is a major economic aspect in both the outcome on other related industries like tourism and manufacturing of aircraft and its own terms of operation. The airline industry is receiving massive media attention unlike other industries through participating and making of government policies. As Hoffman and Bateson (2011) show the major competitors include Southwest Airlines, Delta Airline, and United Airline.

Economic, social-cultural, and technological forces are the external macro-environmental factors Southwest Airlines should be most concerned with. Weak economic growth reduces the purchasing power of an airline’s target market. Southwest, known for being a leader in low cost airline, provides flights at a higher frequency and capacity to attain profit. However, the company experienced increasing overhead through the lapse of long-standing fuel contracts, which previously helped provide a competitive advantage. This factor is also amplified by the growth the company experienced with success. Southwest is the fourth largest airline and has seen fuel cost skyrocket from 29 percent to 35 percent over a seven-year period.

Thesis American Airlines is one of the least fuel-efficient airline company in the world. Through our research, we have found solutions on how American Airlines can fix it poor fuel efficiency. As a group, we each brought a solution to the table. My solution for American Airlines problems is to phase out old non-fuel efficient planes and buy more fuel-efficient planes. problem One of the main reason why American Airlines is among one of the least fuel-efficient airlines companies is that its fleet is not up to par with other airline companies.

Allegiant Travel Company, parent company of Allegiant Air, is a low-cost airline carrierthat caters exclusively to the leisure traveler. There are currently 980 employees that manage the whole company (allegiantair.com). They are known for their innovative and sustainable business models based on keeping fares low and providing additional services for customers.

Launched just 8 years ago, today, the Jetstar Group consists of a network of value-based air carriers that deliver high quality air passenger services for budget-minded travelers across Australia, New Zealand and the Asia Pacific region. Beginning with just 400 employees, the company currently employs more than 7,000 people and carries about 20 million passengers a year. To gain some insights into how the Jetstar Group achieved this impressive growth in such a short amount of time, this paper provides a review of the relevant literature concerning the air passenger industry in general and the business strategy used by the Jetstar Group in particular. A summary of the research and recommendations for this company are provided in the paper's conclusion.

Airline industry is the major engine powering the globalization of businesses and services. Prior to 1970’s, the airline industry was mainly owned and controlled by the governments in different countries. There was no free market competition as travelers have to make do with the services and prices available to them from the few airlines. But with the deregulation of the airline industry that swept across the world after 1970, entry barriers were lowered allowing new start-up of many airline companies, thus engendering competition in the airlines industry. This has led to competitions in various fronts, especially in prices and services provided onboard the flight. This competition has led to formulation of various business modules and the re-strategizing of the already existing and new start-up companies, in order for them to survive the new business environment. The operating environment of the airline industry continues to evolve, thereby presenting a significant challenge for the survival of the industry. Different models and frameworks have been formulated for analyzing the operating environment of various industries. In analyzing the operating environment, it is vital to indentify the different factors that might affect the organization cost, supply and demand. PEST (Political, Economical, Social and Technological) is one of the framework used for analyzing the macro-environment affecting organizations in a

Allegiant Air has had a financial successful story for what people would expect in the low cost carrier markets of today. Allegiant is in its 45th consecutively profitable quarter which is excellent when you consider they were out of bankruptcy in 2001 which makes them continually profitable since 2003. The company has used strategies that avoid barriers imposed by larger and more established carriers by using strategies such as using regional airports instead of major airports, using terminals during off peak times, investments in fuel to curve prices, and assets that are low cost to own and operate. Revenue was just short of a billion and were up 10% from 2012 (Annual Report, 2014).

Besides looking at a business’ internal resources and industry factors, it is necessary to understand the external environment factors that may have a profound impact on a business’ performance and activities in the long term. The external environment analysis (PEST) is the framework which best suits those needs. PEST stands for Political, Economic, Social and Technological. The PEST analysis on McDonald’s can help identify great opportunities or significant threats concerning the changes in the business environment.

PEST analysis, which refers to political, economic, social, and technological factors, is a useful tool for an organisation to capture external changes and its strength and weakness for strategic management (Henry, 2008). This analysis plays an important role as company performance depends on how well the company handles the opportunities and obstacles presented by external change.

• Niche airline service providers are beginning to emerge around specific segments of the market to position their products and services to match demand. For example, the US-based Allegiant is a travel company that happens to operate an airline.

The purpose of this paper is to analyze the airline industry by focusing on its structure, conduct and performance.