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Hydrogenation of Food
The application of chemistry has helped change the food
industry. Today, Hydrogenation in particular plays a big role in
that field. Its applications in the food industry is what helped
fast food restaurant business expand on a big scale as it helps in
making the food fast and in a consistent manner. It has also
allowed baked food producers to replace organic butter with
hydrogenated oils which enabled them to enhance their products
by giving an appropriate texture to their final products.
However, the consumption of hydrogenated food has been found
to cause health implications due to the change in its organic
compounds.
The term Hydrogenation derives from hydrogen as the whole
chemical reaction revolves around it. The chemical reaction
envolves molecular hydrogen (H2) and another compound or
element, usually in the presence of a catalyst such as nickel,
palladium or platinum. In the food industry, Hydrogenation
process is applied on liquid oils in which it converts the oil into
solid or semi-solid fats. Changing the degree of saturation of
the fat changes some important physical properties, such as the
melting range which is why liquid oils become solid or semi-
solid. By adding hydrogen atoms, the oils are converted into
solid fats with an extended shelf-life, so they can be readily
used in commercial baked products and fast foods. Fast food
restaurants for instance rely on hydrogenated oil to enhance the
texture of their food and prepare the food faster. Baked food
producers on the other hand use hydrogenated oil as a
replacement for animal fat to saturate their products as it is a
cheaper substitute and it extends the shelf life of their products.
However, partially hydrogenated oils –also known as trans-fatty
acids or TFA- do not have the same organic features as
naturally saturated or unsaturated fats, and thus, makes them
ditremintal to the human health. Although according to the
European Food Information Council that trans-fatty acids are
not directly linked with diseases such as cancer1, a study
published by the European Journal of Clinical Nutrition has
found evidence that the consumption of FTAs is related to risk
of coronary heart disease (CHD) 2 due to the chemical change
in the organic compound.
An alternative to trans-fats would be simply to return to using
saturated fat from animals such as butter rather than consuming
synthetic FTAs; and as the saying goes: "an ounce of prevention
is worth a pound of cure."
1 "Hydrogenated Oils Adverse Effects On Health". European
Food Information Council. N.p., (2016). Web.
2 "Health Effects Of Trans-Fatty Acids: Experimental And
Observational Evidence". Nature Publishing Group. N.p.,
(2009). Web.
3
Aggregate Operations Planning
Embry Riddle Aeronautical University (Worldwide)
Aggregate Operations Planning (MGMT 651)Edwin Udeh
November, 2015
Contents
Introduction
3
Cost-Reducing/ Production Planning Strategies
5
Pursue Strategy
5
Stable workforce-variable work hours
5
Level Strategy
6
Pure Strategy
6
Subcontracting
6
Benefits of Translating Business Plan
6
Conclusion
7
References
8
Write and submit a three to four-page paper on the benefits of
translating, and how to translate, business plans into labor and
production output plans to minimize the cost of resources.
Introduction
Sales and operations planning help the organizations to adjust
the demand and supply. This procedure is likewise called
aggregate planning. This planning includes working of the
considerable number of operations of the organization like
sales, assembling, operations, fund and so forth. The advertising
team adds to a business plan for the coming 3 to year and a half.
The plan is in units of aggregate item that reduces the overall
cost effect for the operations. . They likewise plan their
advertising plans and offers. The operations division adds to the
genuine operational plan for the creation related operations.
Remembering the business volume, the plans to take care of the
demand are made. However, this is a not a simple errand, since
the demand continues changing with seasons and market
circumstance.
On the supply side, the item families contain the aggregate
though the gatherings of clients fall in the demand side of
aggregate plan. For the most part, the sales and operations
planning is done once in a month. It relates the business and the
key plan to the genuine operational procedures (Nam, &
Logendran, 1992). The chart underneath demonstrates that for
assembling procedures like expert booking, material
prerequisites planning and request planning are readied.
The week by week/day by day workforce and client booking is
additionally planned. The aggregate operational plan is very
nearly the same for the managements and assembling
commercial enterprises.Chart #1:
Forecasting and Demand Management
The main distinction lies in the stock control and generation
techniques. In any case, the assembling and management
operations are not quite the same as one another. The SCP
comprises of the dates and the measures of particular operations
required for every goal. Harsh scope quantification checks the
generation and distribution center units. It additionally screens
the hardware, work and material accessibility.
MRP utilizes the final item prerequisites from the MPS and
discovers the segment parts and subassemblies necessity for
making the material plan. The plan tells when the creation and
buy requests are set so that the items are made according to
plan. The Capacity prerequisite for the generation is
additionally done amid the MRP. Request planning determines
the day by day and week by week activity plan for generation
lines and work place. In management industry, the aggregate
labor is resolved.
At that point the client and the workforce booking amid the day
and the week are finished. Workforce calendars indicate the
quantity of hours for which the management is accessible, the
particular expertise necessity required at a specific period and
so forth. The information for the planning is gotten from the
corporate yearly plan.
So relying upon the quantity of units required later on or the
measure of offers to be accomplished, the aggregate plan is
made. The other way to deal with make the aggregate
arrangement is by mimicking the creation plan and assessing the
necessities of work and types of gear. The plan is further
changed by cut-and-attempt or scientific strategies to go to a
last minimal cost plan.
Cost-Reducing/Production Planning Strategies:
There are major three production planning systems. These
methodologies are connected in distinctive circumstances and
arrangement diversely with labor, working hours, inventories to
reduce the cost:
Pursue Strategy:
Hiring and lying off of workers happens to coordinate the
request rate to the production rate. There ought to be various
prepared individuals accessible who can be procured.
Additionally a few employees may back off their work because
of the apprehension of being ousted after the work gets over.
Stable workforce-variable work hours:
The quantity of employees is kept steady and the working hours
are expanded or diminished as and when required. This
technique keeps away from the bothers of procuring and
terminating the employees.
Level Strategy
A steady workforce works with a consistent production rate.
The impacts of deficiency or overabundance items are borne by
the organization. The inconvenience of this system is the stock
things may get to be outdated after at some point.
Pure Strategy
At the point when stand out methodology is utilized by the
organization to take care of the demand, it is known as Pure
Strategy. A Mixed Strategy is one in which a blend of two or
more systems is utilized.
Subcontracting:
The work is outsourced by the organization in the event that
there is an extensive change in demand. This can be utilized as
a distinct option for contracting and terminating workers
(Kamien, & Li, 1990). On the other hand, the nature of the item
may diminish if the supplier is bad.
Benefits of Translating Business Plan
By utilizing aggregate planning, organizations are better ready
to anticipate their staffing necessities. Organizations that need
extra employees on a provisional premise tend to fill these
positions with laborers from brief business offices. This will
spare the business both time and cash as it won't have to pay the
extra expenses to the staffing office and it won't need to pay its
own particular specialists to prepare the new augmentations.
Another advantage of aggregate planning is it reduces cost for
production process. The aggregate planning is also making an
impact while its implementation. This will reduce the influence
of operative activities and reduce the anxiety by managing the
inventory level and quality issues.
Conclusion
This plan includes various techniques that can help to
implement and influence the supply and demand through a
simple process. This process known as aggregate planning that
reduce the cost for operations. This will also make a mark when
the management implies this process for their future projects.
The increase in productivity and growth observed for this
application.
References
Jacobs, F. R., Richard Chase. Operations and Supply
Management the core, 3rd Edition: McGraw-Hill Learning
Solution
s, 01 2012. VitalBook file.
Kamien, M. I., & Li, L. (1990). Subcontracting, coordination,
flexibility, and production
smoothing in aggregate planning.Management
Science, 36(11), 1352-1363.
Nam, S. J., & Logendran, R. (1992). Aggregate
production planning-a survey of models and
methodologies.European Journal of
Operational Research, 61(3), 255-272.
Corporate Strategy Planning
Strategic Capicity Planning
Operations Aggregate Planning
Production Plan
Master Scheduling
Material Requirement Planning
AIRLINE PRODUCT OFFERING
4
Embry Riddle Aeronautical University (Worldwide)
Written Assignment: Airline Product Offering (MBBA 523)
Edwin Udeh
October 2015
Abstract
The deregulation and privatization of the airline industry have
brought about the emergent of Airline business models.
Deregulation phased out government regulated fares and routes
increasing competition and revenue. Airline business models
main objectives are to minimize operational costs and fares and
to maximize profit based on cost leadership differentiation and
focus strategy. This research paper will review, compare and
contrast between two product models (Full service carriers and
Low cost carriers) in the air passenger airline using Ryanair and
Singapore Airlines as a case analysis.
Contents
Introduction
4
Comparison between Ryanair and Singapore Airline using five
key product features 4
Critical differences
6
Compare the history of the airlines with metric on total revenue
7
Business strategy
9
Conclusion
10
References
11
Introduction
The air transportation in the US was transformed as a result of
deregulation and privatization that took effect in 1978. The
deregulation in the airline industry eliminated the government
policies that control the airfare, the route to fly and regulate the
entry markets. Deregulation and privatization have increased
the airlines competition and the domestic yield have been
decreasing (Guillia and Ashish, 2004) In order to remain viable
and competitive most airlines have improved on their business
models, introducing all kinds of strategy that reduce operational
cost, low fares and increase revenue. This report has been
prepared on two airlines which are Ryanair and Singapore
airways. Both the airlines have been prominent in offering the
best possible services to their customers. The strategic business
development plan for both the airlines has been clearly analysed
in this report. Business expansion plan includes introducing
effective marketing and service plans through which the best
services can be rendered to the clients. Service comparison has
been done with an intention of evaluating the best process that
would help in increasing the sales (Franke 2004). Comparison
between Ryanair and Singapore airlines using five key products
features as a frame work
Doganis in his text book published in 2010 (Airline economics
and marketing) introduced five key products features. Its
emphasis was that airline should decide what kind of products
to offer in the different markets it has chosen and be very
specific. Airline companies should consider its overall business
strategy that will have emerged as a result of its demand
analysis and forecast. According to the CEO of Cathy Pacific
(Tony Tyler) in a statement in February 2009, stated that the
product they offer must be so excellent as to clearly
differentiate them from their competitors. The comparison
between Ryanair and Singapore Airline will be examine by the
use of Doganis five key product features as a framework.
Doganis suggested that every airline potential customers are
influenced by the five key product features in making travel
decision and more importantly in choosing between airlines.
The five key product features are price, schedule, convenience
and image. Ryanair and Singapore airlines are two prominent
airline service providers that aim to provide the best possible
services to the clients. The company offers the best deals and
travel offers which is required for retaining the clients. Both the
companies have Boeing airbuses, which has been uploaded with
latest security features. Different destination options have been
provided by the companies to the clients. This has been done by
the company by venturing into tie-ups with different airline
service providers in the world (Alamdari 2002).
Price: Low price air services included offering to the clients,
low-budget carriers. The price of the tickets is lower than the
charges offered by the home service providers. Such factors
have a direct and major impact on the competition and the price
offered by the rival companies. European flights have basically
concentrated on offering low price services to the clients. The
benefits and other services associated with low price services
are quite less, as compared to other service providers.
Schedule: Airline service providers plan to schedule more
number of flights, which would help in increasing the sales of
the company. For this, an analysis is done for evaluate the
favourite travel destination of the travellers. This helps in
scheduling the number of flights and offers the best and feasible
services to the clients (Mason 2005).
Comfort: Travellers look forth for comfortable and timely travel
plan. Through this method, the airline companies aim to attract
the attention of maximum number of clients. Low priced
services and travel plans help the company to remain connected
with the travellers. This is also required for sustaining tough
competition in the industry. Attempt has been made to provide
maximum comfort to the travellers, as this helps in retaining
clients and improve the performances of the company
(Dobruszkes 2006).
Convenience: Better services and facilities has been provided to
the clients. This has been done for improving the customer
experience with the company. By adopting innovative strategies
and methods, it is possible to increase the sales and value of the
services rendered by the companies.
Image: Brand image has been positively built-up by the airline
companies. This helps in increasing the value of the services
that has been proposed to be offered to the clients. For this,
customer expectations from the brand value have been analysed.
Ryanair operates over 300 Boeing 737-800 with a total fleet
size of 319 aircraft. The airline serves over 30 countries and
their cities in the Europe and, Morocco and Israel. With Ryanair
airways, the flight charges from Europe to the UK are
approximately 250 pounds. Singapore Airlines serves over 64
destinations with strong presence in 35 countries of the six
continent from its primary hub in Singapore. Singapore Airlines
operate over 109 fleet size aircraft mostly with Airbus A380.
Singapore airlines, charges from Singapore to UK 1087 British
pounds.Critical differences
Service quality, price, and the destinations selected by both the
companies are some of the critical factors that impact the
services. Ryanair is known to render low priced services to the
clients, while Singapore airlines aims to increase positive
customer experience with the company (Kangis, O’Reilly 2003).
Compare the history of the airlines with metric on total revenue
Table 1
EUR million except where stated
FY2014
FY2015
Change
Revenue
5,037
5,654
12%
Operating profit
659
1,043
58%
Operating margin
13.1
18.4
+5.4 ppts
Net profit
523
867
66%
Gross cash
3,242
4,796
48%
Gross debt
3,084
4,432
44%
Net debt/(cash)
(158)
(364)
130%
Passengers million
81.7
90.6
11%
Load factor %
83%
88%
5 ppts
Average fare EUR
46
47
1%
Total rev/pax EUR
62
62
1%
Cost per pax EUR
53.6
50.9
-5%
Cost ex fuel per pax EUR
28.9
28.9
0%
Ryanair FY2015 financial and operating highlightsSource:
CAPA – Centre for Aviation, Ryanair
Ryanair is one of the oldest and cheapest airline service
providers in the world. At present, the company offers around
1,600 daily flights from various bases in the world. There are
different service destinations that are being serviced by the
company. The first international operational activities took
place in the year 1986, and since then the company has been
offering different types of services to the customers at the
lowest price. Ryanair in the second quarter of 2015 achieved a
double digit growth in its net profits. This was as a result of
revenue per seat growth outpacing cost per seat growth. After
Ryanair dip in profit in 2014, it has reported two quarters of
earnings growth and reconfirmed its position as European most
profitable airline. Ryanair has raised its 2015 net profit
guidance and expects a result that is around 45% higher than
last year.
Figure 1
Source: CAPA – Centre for Aviation, Singapore
Airlines Group
Singapore airlines were formed in the year 1947, and
commenced operational activities since 1972. At present, the
company offers world’s largest Airbus services to the clients.
The company drafted policies for improving the quality of
services rendered to the clients. Presently the company has
offered different types of services through which the profit
earnings ratio has been increased (Darin, Luengo-Prado 2004).
Singapore Airlines group in the first quarter ending 31st March
of 2015 reported an improved profit driven by a recovery in
revenue. The airline increased its operating profit by 58%
amounting to 318 million US dollars (SGD 409.4 million) which
operating profit represent the highest annual profits since 2011.
Table 2
Services
Ryanair
Singapore
Scheduling of the flights
High
High
Travel charges
Low
Moderate
Options for the services
High
High
Marketing
High
High
Airlines Service Structure
Business strategy
The business strategy for Ryanair has been to render quality
services to the clients, at a reasonably lower price. As per the
strategy of the company, the management work towards
increasing the overall business performances. This has been
done by offering more destinations to the clients, and increase
the number of travel options that has been provided to the
customers. In this process, innovative strategies are adopted and
implemented by the management. Strategic management for the
company includes developing brand marketing process, which
includes promoting the services that is provided to the clients.
Through marketing and effective branding method, the
managers of the company could attract clients from different
parts of the world. The purpose of the company is to provide
comfortable services to the clients, and reduce the price for the
services (Tretheway 2004). Conclusion
Low priced services provided by the airline companies are one
of the positive factors that help in retaining the clients. Better
services and facilities are some of the other features that are
included in this process. The management of the airline
companies work towards developing and selling different
positive factors, through which the tough competition in the
industry can be sustained. The strategic changes are introduced
and the process is constantly monitored. Through such process,
the changes intended to be implemented by the company are
closely evaluated, as this reduces the possibilities of errors.
References
Alamdari, F. (2002). Regional development in airlines and
travel agents relationship. Journal of Air Transport
Management, No. (8), pp. 339–348.
Darin, L., Luengo-Prado, M. (2004). Are passengers willing to
pay more for additional legroom? Journal of Air Transport
Management, No. 10, pp. 377–383.
Dobruszkes, F. (2006). An analysis of European low-cost
airlines and their networks. Journal of Transport Geography,
Vol. 14, No. 4, pp. 249–264.
Doganis, R. (2010). Flying off course: Airline economics and
marketing 4th ed. London Routledge.
Franke, M. (2004). Competition between network carriers and
low-cost carriers – retreat battle or breakthrough to a new level
of efficiency? Journal of Air Transport Management, Vol. 10,
pp. 15–21.
Kangis, P.; O’Reilly, D. (2003). Strategies in a dynamic
marketplace. Journal of Business Research, Vol. 56, pp. 105–
111.
Mason, K. (2005). Observations of fundamental changes in the
demand for aviation services. Journal of Air Transport
Management, Vol. 11, pp. 19–25
Ryanair: Retrieved from http://ww.ryanair.com
Singapore Airline: Retrieved from http://www. Singapore
air.com
Tretheway, M. (2004). Distortions of airline revenues: why the
network airline business model is broken. Journal of Air
Transport Management, Vol. 10, pp. 3–14.
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  • 1. Hydrogenation of Food The application of chemistry has helped change the food industry. Today, Hydrogenation in particular plays a big role in that field. Its applications in the food industry is what helped fast food restaurant business expand on a big scale as it helps in making the food fast and in a consistent manner. It has also allowed baked food producers to replace organic butter with hydrogenated oils which enabled them to enhance their products by giving an appropriate texture to their final products. However, the consumption of hydrogenated food has been found to cause health implications due to the change in its organic compounds. The term Hydrogenation derives from hydrogen as the whole chemical reaction revolves around it. The chemical reaction envolves molecular hydrogen (H2) and another compound or element, usually in the presence of a catalyst such as nickel, palladium or platinum. In the food industry, Hydrogenation process is applied on liquid oils in which it converts the oil into solid or semi-solid fats. Changing the degree of saturation of the fat changes some important physical properties, such as the melting range which is why liquid oils become solid or semi- solid. By adding hydrogen atoms, the oils are converted into solid fats with an extended shelf-life, so they can be readily used in commercial baked products and fast foods. Fast food restaurants for instance rely on hydrogenated oil to enhance the texture of their food and prepare the food faster. Baked food producers on the other hand use hydrogenated oil as a replacement for animal fat to saturate their products as it is a cheaper substitute and it extends the shelf life of their products. However, partially hydrogenated oils –also known as trans-fatty acids or TFA- do not have the same organic features as naturally saturated or unsaturated fats, and thus, makes them ditremintal to the human health. Although according to the European Food Information Council that trans-fatty acids are
  • 2. not directly linked with diseases such as cancer1, a study published by the European Journal of Clinical Nutrition has found evidence that the consumption of FTAs is related to risk of coronary heart disease (CHD) 2 due to the chemical change in the organic compound. An alternative to trans-fats would be simply to return to using saturated fat from animals such as butter rather than consuming synthetic FTAs; and as the saying goes: "an ounce of prevention is worth a pound of cure." 1 "Hydrogenated Oils Adverse Effects On Health". European Food Information Council. N.p., (2016). Web. 2 "Health Effects Of Trans-Fatty Acids: Experimental And Observational Evidence". Nature Publishing Group. N.p., (2009). Web. 3 Aggregate Operations Planning
  • 3. Embry Riddle Aeronautical University (Worldwide) Aggregate Operations Planning (MGMT 651)Edwin Udeh November, 2015 Contents Introduction 3 Cost-Reducing/ Production Planning Strategies 5 Pursue Strategy 5 Stable workforce-variable work hours 5 Level Strategy 6 Pure Strategy 6 Subcontracting 6 Benefits of Translating Business Plan 6 Conclusion
  • 4. 7 References 8 Write and submit a three to four-page paper on the benefits of translating, and how to translate, business plans into labor and production output plans to minimize the cost of resources. Introduction Sales and operations planning help the organizations to adjust the demand and supply. This procedure is likewise called aggregate planning. This planning includes working of the considerable number of operations of the organization like sales, assembling, operations, fund and so forth. The advertising team adds to a business plan for the coming 3 to year and a half. The plan is in units of aggregate item that reduces the overall cost effect for the operations. . They likewise plan their advertising plans and offers. The operations division adds to the genuine operational plan for the creation related operations. Remembering the business volume, the plans to take care of the demand are made. However, this is a not a simple errand, since the demand continues changing with seasons and market circumstance. On the supply side, the item families contain the aggregate though the gatherings of clients fall in the demand side of aggregate plan. For the most part, the sales and operations planning is done once in a month. It relates the business and the key plan to the genuine operational procedures (Nam, & Logendran, 1992). The chart underneath demonstrates that for assembling procedures like expert booking, material
  • 5. prerequisites planning and request planning are readied. The week by week/day by day workforce and client booking is additionally planned. The aggregate operational plan is very nearly the same for the managements and assembling commercial enterprises.Chart #1: Forecasting and Demand Management The main distinction lies in the stock control and generation techniques. In any case, the assembling and management operations are not quite the same as one another. The SCP comprises of the dates and the measures of particular operations required for every goal. Harsh scope quantification checks the generation and distribution center units. It additionally screens the hardware, work and material accessibility. MRP utilizes the final item prerequisites from the MPS and discovers the segment parts and subassemblies necessity for making the material plan. The plan tells when the creation and buy requests are set so that the items are made according to plan. The Capacity prerequisite for the generation is additionally done amid the MRP. Request planning determines the day by day and week by week activity plan for generation lines and work place. In management industry, the aggregate labor is resolved. At that point the client and the workforce booking amid the day and the week are finished. Workforce calendars indicate the quantity of hours for which the management is accessible, the particular expertise necessity required at a specific period and so forth. The information for the planning is gotten from the corporate yearly plan. So relying upon the quantity of units required later on or the measure of offers to be accomplished, the aggregate plan is made. The other way to deal with make the aggregate arrangement is by mimicking the creation plan and assessing the necessities of work and types of gear. The plan is further
  • 6. changed by cut-and-attempt or scientific strategies to go to a last minimal cost plan. Cost-Reducing/Production Planning Strategies: There are major three production planning systems. These methodologies are connected in distinctive circumstances and arrangement diversely with labor, working hours, inventories to reduce the cost: Pursue Strategy: Hiring and lying off of workers happens to coordinate the request rate to the production rate. There ought to be various prepared individuals accessible who can be procured. Additionally a few employees may back off their work because of the apprehension of being ousted after the work gets over. Stable workforce-variable work hours: The quantity of employees is kept steady and the working hours are expanded or diminished as and when required. This technique keeps away from the bothers of procuring and terminating the employees. Level Strategy A steady workforce works with a consistent production rate. The impacts of deficiency or overabundance items are borne by the organization. The inconvenience of this system is the stock things may get to be outdated after at some point. Pure Strategy At the point when stand out methodology is utilized by the organization to take care of the demand, it is known as Pure Strategy. A Mixed Strategy is one in which a blend of two or more systems is utilized.
  • 7. Subcontracting: The work is outsourced by the organization in the event that there is an extensive change in demand. This can be utilized as a distinct option for contracting and terminating workers (Kamien, & Li, 1990). On the other hand, the nature of the item may diminish if the supplier is bad. Benefits of Translating Business Plan By utilizing aggregate planning, organizations are better ready to anticipate their staffing necessities. Organizations that need extra employees on a provisional premise tend to fill these positions with laborers from brief business offices. This will spare the business both time and cash as it won't have to pay the extra expenses to the staffing office and it won't need to pay its own particular specialists to prepare the new augmentations. Another advantage of aggregate planning is it reduces cost for production process. The aggregate planning is also making an impact while its implementation. This will reduce the influence of operative activities and reduce the anxiety by managing the inventory level and quality issues. Conclusion This plan includes various techniques that can help to implement and influence the supply and demand through a simple process. This process known as aggregate planning that reduce the cost for operations. This will also make a mark when the management implies this process for their future projects. The increase in productivity and growth observed for this application.
  • 8. References Jacobs, F. R., Richard Chase. Operations and Supply Management the core, 3rd Edition: McGraw-Hill Learning Solution s, 01 2012. VitalBook file. Kamien, M. I., & Li, L. (1990). Subcontracting, coordination, flexibility, and production smoothing in aggregate planning.Management Science, 36(11), 1352-1363. Nam, S. J., & Logendran, R. (1992). Aggregate production planning-a survey of models and methodologies.European Journal of Operational Research, 61(3), 255-272. Corporate Strategy Planning Strategic Capicity Planning
  • 9. Operations Aggregate Planning Production Plan Master Scheduling Material Requirement Planning AIRLINE PRODUCT OFFERING 4 Embry Riddle Aeronautical University (Worldwide) Written Assignment: Airline Product Offering (MBBA 523) Edwin Udeh
  • 10. October 2015 Abstract The deregulation and privatization of the airline industry have brought about the emergent of Airline business models. Deregulation phased out government regulated fares and routes increasing competition and revenue. Airline business models main objectives are to minimize operational costs and fares and to maximize profit based on cost leadership differentiation and focus strategy. This research paper will review, compare and contrast between two product models (Full service carriers and Low cost carriers) in the air passenger airline using Ryanair and Singapore Airlines as a case analysis. Contents Introduction 4 Comparison between Ryanair and Singapore Airline using five key product features 4 Critical differences 6 Compare the history of the airlines with metric on total revenue 7 Business strategy
  • 11. 9 Conclusion 10 References 11 Introduction The air transportation in the US was transformed as a result of deregulation and privatization that took effect in 1978. The deregulation in the airline industry eliminated the government policies that control the airfare, the route to fly and regulate the entry markets. Deregulation and privatization have increased the airlines competition and the domestic yield have been decreasing (Guillia and Ashish, 2004) In order to remain viable and competitive most airlines have improved on their business models, introducing all kinds of strategy that reduce operational cost, low fares and increase revenue. This report has been prepared on two airlines which are Ryanair and Singapore airways. Both the airlines have been prominent in offering the best possible services to their customers. The strategic business development plan for both the airlines has been clearly analysed in this report. Business expansion plan includes introducing effective marketing and service plans through which the best services can be rendered to the clients. Service comparison has been done with an intention of evaluating the best process that would help in increasing the sales (Franke 2004). Comparison
  • 12. between Ryanair and Singapore airlines using five key products features as a frame work Doganis in his text book published in 2010 (Airline economics and marketing) introduced five key products features. Its emphasis was that airline should decide what kind of products to offer in the different markets it has chosen and be very specific. Airline companies should consider its overall business strategy that will have emerged as a result of its demand analysis and forecast. According to the CEO of Cathy Pacific (Tony Tyler) in a statement in February 2009, stated that the product they offer must be so excellent as to clearly differentiate them from their competitors. The comparison between Ryanair and Singapore Airline will be examine by the use of Doganis five key product features as a framework. Doganis suggested that every airline potential customers are influenced by the five key product features in making travel decision and more importantly in choosing between airlines. The five key product features are price, schedule, convenience and image. Ryanair and Singapore airlines are two prominent airline service providers that aim to provide the best possible services to the clients. The company offers the best deals and travel offers which is required for retaining the clients. Both the companies have Boeing airbuses, which has been uploaded with latest security features. Different destination options have been provided by the companies to the clients. This has been done by
  • 13. the company by venturing into tie-ups with different airline service providers in the world (Alamdari 2002). Price: Low price air services included offering to the clients, low-budget carriers. The price of the tickets is lower than the charges offered by the home service providers. Such factors have a direct and major impact on the competition and the price offered by the rival companies. European flights have basically concentrated on offering low price services to the clients. The benefits and other services associated with low price services are quite less, as compared to other service providers. Schedule: Airline service providers plan to schedule more number of flights, which would help in increasing the sales of the company. For this, an analysis is done for evaluate the favourite travel destination of the travellers. This helps in scheduling the number of flights and offers the best and feasible services to the clients (Mason 2005). Comfort: Travellers look forth for comfortable and timely travel plan. Through this method, the airline companies aim to attract the attention of maximum number of clients. Low priced services and travel plans help the company to remain connected with the travellers. This is also required for sustaining tough competition in the industry. Attempt has been made to provide maximum comfort to the travellers, as this helps in retaining clients and improve the performances of the company (Dobruszkes 2006).
  • 14. Convenience: Better services and facilities has been provided to the clients. This has been done for improving the customer experience with the company. By adopting innovative strategies and methods, it is possible to increase the sales and value of the services rendered by the companies. Image: Brand image has been positively built-up by the airline companies. This helps in increasing the value of the services that has been proposed to be offered to the clients. For this, customer expectations from the brand value have been analysed. Ryanair operates over 300 Boeing 737-800 with a total fleet size of 319 aircraft. The airline serves over 30 countries and their cities in the Europe and, Morocco and Israel. With Ryanair airways, the flight charges from Europe to the UK are approximately 250 pounds. Singapore Airlines serves over 64 destinations with strong presence in 35 countries of the six continent from its primary hub in Singapore. Singapore Airlines operate over 109 fleet size aircraft mostly with Airbus A380. Singapore airlines, charges from Singapore to UK 1087 British pounds.Critical differences Service quality, price, and the destinations selected by both the companies are some of the critical factors that impact the services. Ryanair is known to render low priced services to the clients, while Singapore airlines aims to increase positive customer experience with the company (Kangis, O’Reilly 2003).
  • 15. Compare the history of the airlines with metric on total revenue Table 1 EUR million except where stated FY2014 FY2015 Change Revenue 5,037 5,654 12% Operating profit 659 1,043 58% Operating margin 13.1 18.4 +5.4 ppts Net profit 523 867 66% Gross cash 3,242 4,796
  • 16. 48% Gross debt 3,084 4,432 44% Net debt/(cash) (158) (364) 130% Passengers million 81.7 90.6 11% Load factor % 83% 88% 5 ppts Average fare EUR 46 47 1% Total rev/pax EUR 62 62 1%
  • 17. Cost per pax EUR 53.6 50.9 -5% Cost ex fuel per pax EUR 28.9 28.9 0% Ryanair FY2015 financial and operating highlightsSource: CAPA – Centre for Aviation, Ryanair Ryanair is one of the oldest and cheapest airline service providers in the world. At present, the company offers around 1,600 daily flights from various bases in the world. There are different service destinations that are being serviced by the company. The first international operational activities took place in the year 1986, and since then the company has been offering different types of services to the customers at the lowest price. Ryanair in the second quarter of 2015 achieved a double digit growth in its net profits. This was as a result of revenue per seat growth outpacing cost per seat growth. After Ryanair dip in profit in 2014, it has reported two quarters of earnings growth and reconfirmed its position as European most profitable airline. Ryanair has raised its 2015 net profit guidance and expects a result that is around 45% higher than last year.
  • 18. Figure 1 Source: CAPA – Centre for Aviation, Singapore Airlines Group Singapore airlines were formed in the year 1947, and commenced operational activities since 1972. At present, the company offers world’s largest Airbus services to the clients. The company drafted policies for improving the quality of services rendered to the clients. Presently the company has offered different types of services through which the profit earnings ratio has been increased (Darin, Luengo-Prado 2004). Singapore Airlines group in the first quarter ending 31st March of 2015 reported an improved profit driven by a recovery in revenue. The airline increased its operating profit by 58% amounting to 318 million US dollars (SGD 409.4 million) which operating profit represent the highest annual profits since 2011. Table 2 Services Ryanair Singapore Scheduling of the flights High High Travel charges
  • 19. Low Moderate Options for the services High High Marketing High High Airlines Service Structure Business strategy The business strategy for Ryanair has been to render quality services to the clients, at a reasonably lower price. As per the strategy of the company, the management work towards increasing the overall business performances. This has been done by offering more destinations to the clients, and increase the number of travel options that has been provided to the customers. In this process, innovative strategies are adopted and implemented by the management. Strategic management for the company includes developing brand marketing process, which includes promoting the services that is provided to the clients. Through marketing and effective branding method, the managers of the company could attract clients from different parts of the world. The purpose of the company is to provide comfortable services to the clients, and reduce the price for the
  • 20. services (Tretheway 2004). Conclusion Low priced services provided by the airline companies are one of the positive factors that help in retaining the clients. Better services and facilities are some of the other features that are included in this process. The management of the airline companies work towards developing and selling different positive factors, through which the tough competition in the industry can be sustained. The strategic changes are introduced and the process is constantly monitored. Through such process, the changes intended to be implemented by the company are closely evaluated, as this reduces the possibilities of errors. References Alamdari, F. (2002). Regional development in airlines and travel agents relationship. Journal of Air Transport Management, No. (8), pp. 339–348. Darin, L., Luengo-Prado, M. (2004). Are passengers willing to pay more for additional legroom? Journal of Air Transport Management, No. 10, pp. 377–383. Dobruszkes, F. (2006). An analysis of European low-cost airlines and their networks. Journal of Transport Geography, Vol. 14, No. 4, pp. 249–264.
  • 21. Doganis, R. (2010). Flying off course: Airline economics and marketing 4th ed. London Routledge. Franke, M. (2004). Competition between network carriers and low-cost carriers – retreat battle or breakthrough to a new level of efficiency? Journal of Air Transport Management, Vol. 10, pp. 15–21. Kangis, P.; O’Reilly, D. (2003). Strategies in a dynamic marketplace. Journal of Business Research, Vol. 56, pp. 105– 111. Mason, K. (2005). Observations of fundamental changes in the demand for aviation services. Journal of Air Transport Management, Vol. 11, pp. 19–25 Ryanair: Retrieved from http://ww.ryanair.com Singapore Airline: Retrieved from http://www. Singapore air.com Tretheway, M. (2004). Distortions of airline revenues: why the network airline business model is broken. Journal of Air Transport Management, Vol. 10, pp. 3–14.