Presentation by CBS students on Star alliance


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  • Presentation by CBS students on Star alliance

    1. 1. Represented by- Navodit Saurabh Rajan Ajay Atul
    2. 2. <ul><li>Star Alliance is the world's first and largest airline alliance . </li></ul><ul><li>Star Alliance currently has more than 21,200 daily departures , and serves 1,172 airports in 181 countries . </li></ul><ul><li>Launching date 14 th may 1997. </li></ul><ul><li>Star Alliance has since grown considerably and now has 28 member airlines. </li></ul>
    3. 3. <ul><li>An airline alliance is an agreement between two or more airlines to cooperate on a substantial level. </li></ul><ul><li>Alliances provide a network of connectivity and convenience for international passengers and international packages. </li></ul>
    4. 4. <ul><li>Cost reduction from sharing of: </li></ul><ul><ul><li>Sales offices </li></ul></ul><ul><ul><li>Maintenance facilities </li></ul></ul><ul><ul><li>Operational facilities, e.g. catering or computer systems. </li></ul></ul><ul><ul><li>Operational staff, e.g. ground handling personnel, at check-in and boarding desks. </li></ul></ul><ul><li>Traveler benefits can include: </li></ul><ul><ul><li>Lower prices due to lowered operational costs for a given route. </li></ul></ul><ul><ul><li>More destinations within easy reach. </li></ul></ul><ul><ul><li>Shorter travel times as a result of optimised transfers. </li></ul></ul>
    5. 5. <ul><li>Before Star Alliance, global travel was complex and inconvenient. </li></ul><ul><li>Connections were uncoordinated, problematic and time consuming. </li></ul>History Network Benefits
    6. 8. Network Benefits 2003 1999 2000 1997 May 14 Air Canada, Lufthansa, SAS, Thai Airways International and United Airlines launch the Star Alliance network. October VARIG Brazilian Airlines joins the Star Alliance network. March Ansett Australia and Air New Zealand join the Star Aliance network. October With an official Launch Event in Tokyo, ANA joins the Star Alliance network and Singapore Airlines officially gains Observer Status to join the Alliance. March The Austrian Airlines Group, comprising Austrian Airlines, Lauda Air and Tyrolean Airways becomes the 10th member of Star Alliance. April Singapore Airlines joins Star Alliance. July British Midland and Mexicana join Star Alliance. March Asiana Airlines joins the Star Alliance network. April Spanair joins the Star Alliance network. October LOT joins Star Alliance. May – US Airways application approved
    7. 9. The Star Alliance Network continues to grow. Network Benefits Destinations 55 Fleet 50 longhaul 5 shorthaul 45 Annual Passengers 2.8m Annual pax revenue $553m Employees 4,100
    8. 11. <ul><li>Hubs in Philadelphia, Pittsburgh, Charlotte </li></ul><ul><li>279 mainline aircraft </li></ul><ul><li>47 m passengers </li></ul><ul><li>40,000 employees </li></ul><ul><li>Adding 100 destinations to the Star Alliance network </li></ul><ul><li>Compare Lufthansa </li></ul><ul><li>222 mainline aircraft </li></ul><ul><li>49 m passengers </li></ul><ul><li>39,000 employees </li></ul>External Presentation .:. New Member to be .:. p. .:.
    9. 12. <ul><li>Compared to other alliances, Star Alliance offers today </li></ul><ul><ul><li>More flights – over 10,000 non-stop flights daily – an alliance member carrier flight takes off or lands every 4 seconds </li></ul></ul><ul><ul><li>More places – 128 countries and over 700 airports </li></ul></ul><ul><ul><li>Better connected – via coordinated schedules at key hubs </li></ul></ul>Benefits
    10. 13. <ul><li>Star alliance sky team one world </li></ul><ul><li>28 members 13 members 11 members </li></ul><ul><li>Dest-1172 Dest-898 Dest-871 </li></ul><ul><li>Rev-$156.8b Rev-$98b Rev-$90b </li></ul><ul><li>Passengers per year- </li></ul><ul><li>672 million 385 million 335 million </li></ul><ul><li>Future members- </li></ul><ul><li>Air India china airlines kingfisher </li></ul>
    11. 14. KL/CO/NW joining Global RPK Share 2009 Source: IATA WATS, 2009 LX joining
    12. 16. ATM
    13. 17. <ul><ul><li>StarNet links member airlines computer systems </li></ul></ul><ul><ul><li>It keeps passengers and information flowing </li></ul></ul><ul><ul><li>Allows more E-transactions, e.g. Interline E-ticket, PNR-Servicing, Schedule, Operational & Accounting Data Exchanges </li></ul></ul>Network
    14. 19. BTI Switzerland & Star Alliance - Key Account & Sales Workshop
    15. 20. Agent Educational Programme offered by Star Alliance Italy
    16. 21. <ul><li>Large geographic network. </li></ul><ul><li>Cost savings via joint purchasing, marketing, planning, etc. </li></ul><ul><li>Higher number of flights offered. (increases potential of sales) </li></ul><ul><li>Relatively seamless travel experience. </li></ul><ul><li>Code sharing. (Increased route rationalization.) </li></ul>
    17. 22. <ul><li>Increased opportunity to reach economies of scale. </li></ul><ul><li>Assist in elevating brand awareness (i.e. Thai airlines, much greater exposure) </li></ul>
    18. 23. <ul><li>Facilities in airports. </li></ul><ul><li>Services in regions. </li></ul><ul><li>Seamless travel experience is inconsistent. </li></ul><ul><li>Lack of innovation. Alliance is essentially a facilitator, not an innovator. </li></ul><ul><li>IT systems (incompatibility of systems) </li></ul>
    19. 24. <ul><li>Expansion in INDIA. </li></ul><ul><li>Further integration of services (i.e. Facilities in airports, services in regions, IT systems, etc) </li></ul><ul><li>Development of tools to measure effectiveness of alliance (metrics). i.e. Measure which passengers were brought in as a result of alliance. Also, measure the intangible benefits that the alliance exudes across the board. </li></ul>
    20. 25. <ul><li>Too many alliance members. Can lead to conflicts of interest, which in turn can lead to dwindling competitive advantage. </li></ul><ul><li>Airline industry is fragile which poses many uncertainties. </li></ul><ul><li>Terror threats 9/11,26/11. </li></ul><ul><li>Rise in popularity of low cost travel carriers. </li></ul>
    21. 26. <ul><li>Poor integration can lead to lose of consumer confidence in the alliance. </li></ul><ul><li>(i.e. Ansett Australia went bankrupt in 2001 causes a huge disruption in baggage transportation resulting in negative publicity for the entire alliance) </li></ul>
    22. 27. <ul><li>Geographic :customers are located globally with varying wants and needs or behaviors and the organization attempts to exploit this by providing airline services to major cities/ routes evidenced. </li></ul><ul><li>Psychographic – attempts to capture what is driving the customer’s behavior, such as values. variations of cabin classes (First, Business and Executive Economy) to meet the product needs and wants of people. </li></ul>
    23. 28. <ul><li>Behavioral – Segmenting the market based on observable issues on consumer behaviour when consuming the products. Characteristics include frequency of consumption, buyer readiness and commitment. The corporate market tends to be a frequent flyer that could gain benefits from SIA’s Frequent Flyer program (KrisFlyer and PPS Club), in return for consumer loyalty to the airline. </li></ul>
    24. 29. <ul><li>Positioning is not what you do to a product; it is what you do to the mind of a client. </li></ul>
    25. 30. <ul><li>Target high-international travelers. </li></ul><ul><li>The goal of the campaign is to help travelers </li></ul><ul><li>understand the benefits of the Alliance and encourage them to travel on Star Alliance </li></ul><ul><li>member carriers. </li></ul>
    26. 31. <ul><li>Marketing communications objectives </li></ul><ul><li>To develop Brand awareness. </li></ul><ul><li>To increase demand/sales for offering. </li></ul><ul><li>To change customer attitudes/perceptions about the firm. </li></ul><ul><li>To encourage repeat traveling. </li></ul><ul><li>To become highly competitive. </li></ul>
    27. 32. <ul><li>Advertising design : all under one umbrella </li></ul><ul><li>Type of appeal : humour </li></ul><ul><li>Target people business class people </li></ul><ul><li>Slogan : The way the earth connects </li></ul><ul><li>Media selection : business journals , newspaper & television </li></ul>
    28. 33. <ul><li>promotional tools to be selected </li></ul><ul><li>Television </li></ul><ul><li>Business journals </li></ul><ul><li>Corporate newspaper </li></ul>
    29. 34. <ul><li>Percentage of the budget </li></ul><ul><li>Television 20% </li></ul><ul><li>Business journals & magazines 50% </li></ul><ul><li>Corporate newspaper 30% </li></ul>
    30. 35. <ul><li>must focus on moving forward is to further integrate their services </li></ul><ul><li>more offering to customers a much larger travel coverage area, frequent flyer miles, etc. </li></ul><ul><li>create a more robust centralized IT infrastructure that integrates all systems. </li></ul><ul><li>develop the necessary tools to quantify the alliances absolute value. </li></ul>
    31. 36. Thank You