Assignment Sample on TL1167 The Nature and Characteristics of the Hospitality Industry
Introduction
Aviation tends to provide the benefit of a rapid worldwide transportation network, and hence the process makes it easier for the respective business organisations operating in the hospitality industry. In other words, it can be stated that the airline sector tends to generate economic growth and also facilitates international trade and tourism. It has been identified that in the world tourism sector, approximately 19million jobs are available with the purpose of supporting tourists, who tend to come by air (wttc.org, 2021). Hence, without proper airline sector activities, the chances of performing effective hospitality sector functions tend to be on the lower side. The study in this case focuses on the cost and budget characteristics of the airline sector, in the case of the hospitality industry.
Discussion
It has become extremely crucial to analyse the operations of the respective leading airline companies recently, in terms of figuring out the benefits that can be achieved by the organisations of the hospitality sector. As per the view of La et al. (2021), in order to analyse the characteristics of low-cost airline operations, it is imperative to focus initially on different low-cost airlines, along with non-low-cost airlines. For example, the organisation Ryanair, has been able to make obscure as well as unknown airports visible, which in return has effectively helped the business organisation in terms of performing low cost operations. Moreover, the function has also effectively helped companies in terms of providing quality services to the respective customers at a pleasant price.
The Product-Service Continuum
The element of Product-Service Continuum tends to possess the ability to help in analysing an organisation’s operational strategies, within which there will be either more of a service or product perspective, towards the customers. It is quite evident that airline sector companies focus on providing services rather than products, and hence the service in this case tends to be related to cheap transportation that too by ensuring quality standards. As per the view of Kuljanin (2019), it has been observed on a number of occasions that low-cost carriers tend to offer different supplementary benefits, which ranges from stipulated time and extra space for luggage or legroom. It is quite evident that customers have the tendency of considering ticket prices as one of the crucial factors in terms of focusing on a particular airline company. This can be marked as one of the crucial areas, within which the premium or companies that offer extra budget services fail to compete with that of the low-cost carriers. As per the opinion of Chiambaretto (2021), in the context of premium airline companies, the overall operational cost tends to decrease the chances of offering services at lower price. Moreover, with respect to the holiday purposes of the customers, budget airlines can only offer seat-only chartered places, and also the unavailability of proper and luxurious services tend to mark these as the least favourites for the respective customers.
On the other hand, due to the fact that the overall competition level among the respective budget carriers have increased to a large extent, over the course of time, the level of competitive stiffness among the different carriers have also increased. In other words, it can be stated that the low-cost budget carriers are not only competing amongst themselves, but are competing with premium airlines sector companies as well. This increasing level of competition can be marked as one of the crucial reasons due to which a number of companies of this sector have focused on operating within the aviation sector, however the overall period of operation has forced them to stop operating, or even getting seized.
Moreover, another key area of differentiation between the respective budget friendly and premium airlines sector companies is related to the fact that whether the employees are working in multiple roles to lower down operational costs or not. As per the view of Reim et al. (2021), due to the fact that the budget airlines have been able to develop a structure of proper service on demand, the chances of implementing better strategies tend to be on the higher side. However, in the context of the international gateways, it is also extremely important to understand the fact that the number of secondary affordable airports are low, and hence the companies have to focus on the single available airport. This can be marked as one of the key reasons due to which the budget airlines have been focusing on the element of “point-to-point” service between midsize cities and secondary airports as key marketplaces, with the respect to the objective of decreasing costs. As per the opinion of Klophaus and Fichert (2019), “point-to-point” service can be defined as service that tends to include change of planes and hence customers might have to check for luggage at each of the checking areas. Moreover, another key advantage that has been gained by the respective low-cost airlines is related to the fact that airports have started to unbundle the key services, with the objective of ensuring that the respective airlines are paying only for the services that they have accessed. It is quite evident that the strategy can effectively help the airlines sector organisations to reduce cost of airlines, properly identify required airport services, and also reward airlines for more efficient use of airport facilities.
Apart from all these, another key factor in this case is related to the fact that the respective Non-business passengers tend to possess the ability of surpassing the respective price-conscious business passengers due to the difference between the fare of the airline’s services. As per the view of Sezgen et al. (2019), it has been identified that the wages of low-cost carrier flight attendants are quite low compared to that of the premium airlines. Therefore, it can be started that the price range of the respective services that are being offered by the companies by considering all the factors, can be marked as a key factor in terms of defining market position. Hence, the chances of customers relating low priced tickets with poor quality flight equipment tends to be on the higher side.
On the other hand, it is quite evident that the respective operational features of the premium budget airlines tend to be different from that of the low-cost carriers, in a number of ways. As commented by Wanke et al. (2021), one of the key areas of difference between low cost airlines and premium ones is related to the factor of network structure that can effectively allow effective operations. Moreover, since the network structure of the airline companies are different, different commercial and legal advantages are being gained by the premium budget airlines in this case. Similarly, the respective low-cost carriers in this case tend to operate with pricing policies that are quite dynamic in nature and hence the chances of offering substantial discounts to the respective customers tend to be on the higher side as well. As stated by Hunt and Truong (2019), low cost carriers compared to that of the premium budget ones tend to choose and earn ancillary revenues by selling other products and services both on the aircraft and through their websites. Hence, these factors can effectively develop a number of additional fees with respect to the price of services that are being offered. However, it is also imperative in this case to understand the fact that these factors are not the same in the context of all low-cost carriers.
On the other hand, due to the factor of operational difference between the low-cost carriers and the budgetary ones, it has become quite necessary for the premium airlines to operate with a different marketing strategy, as the network structure is also different in this case. As per the view of Loh et al. (2020), due to the fact that the operational and marketing strategies are different between low cost carriers and the budgetary ones, the chances of bundling and reallocation are also different in both cases. Hence, the network structure is the key area of difference between low cost carriers and the budgetary ones as the structure allows premium ones to serve significantly more origins and destinations than most low-cost carriers. In other words, it can be stated that the respective fares for the customers in the case of a carrier’s hub are cheaper than those taking similar routes which do not include the carrier’s hub. Hence, it can be effectively stated in this case that the low-cost carriers have been quite successful in terms of changing the dynamics of the aviation market to a large extent. Moreover, as stated by Wegmann and Jiao (2017), the strategic and operational approach of low-cost carriers have become the guiding principles in this case. Therefore, it has become extremely crucial for the respective premium budget airlines to change strategic approaches, as the low-cost carriers are offering substantially cheaper fares in this case. As per the view of Gisario et al. (2019), the aviation industry has been able to identify a number of structural changes in recent times, as the competition level between the low-cost carriers and the premium companies have increased to a large extent. On the other hand, due to the different advantages gained by the low-cost carriers, a number of start-up airlines have started to provide support to these companies. This can be marked as one of the key reasons due to which the respective low-cost carriers have started to operate in the worldwide phenomena, with respect to both the long-and short-haul markets. This can be marked as an imperative factor that has resulted in a change in the competitiveness of major airlines in the industry. Similarly, due to the fact that the low-cost carriers are being supported by start-up companies, the operational cost of the organisations have not increased as well.
On the other hand, it is quite evident that most of the organisations tend to consider customers as the first priority, which remains the same in the context of the premium budget airlines. However, as per the view of Loh et al. (2020), it has been observed that the low-cost carriers of the airlines sector tend to consider the employees as the first priority. This can be marked as one the key reasons due to which the operational costs are on the lower side in the context of the low-cost carriers as the companies are providing the employees with a number of benefits. Hence, another structural difference can be identified in this case between the respective low-cost carriers and the premium budget airlines. In other words, it can be stated that apart from the other factors that have enforced structural differences between the low-cost carriers and the premium budgetary ones, the process by which the organisations are dealing with respective customers can be marked as another imperative factor in this case.
Conclusion
The study concludes that the respective low-cost carriers tend to provide a mixture of products and services, that too at lower prices compared to that of premium budget airlines. Moreover, it can also be concluded in this case that the level of availability of resources can be marked as one of the key factors that tends to create differences between the respective low-cost carriers as well as the premium budget companies of the airlines sector. On the other hand, the study in this case also concludes that despite the fact that the respective low-cost carriers are focused on providing services at a cheaper price compared to that of others, the companies can only provide high volumes, but the level of variety and variability tends to be on the lower side. Apart from all these, it can also be concluded in this case that it has become extremely crucial for the premium budget companies to figure out strategies by which low cost services can be provided, in terms of achieving a proper level of competitive advantage.
References
Chiambaretto, P., (2021). Air passengers’ willingness to pay for ancillary services on long-haul flights. Transportation Research Part E: Logistics and Transportation Review, 147, p.102234.
Gisario, A., Kazarian, M., Martina, F. and Mehrpouya, M., (2019). Metal additive manufacturing in the commercial aviation industry: A review. Journal of Manufacturing Systems, 53, pp.124-149.
Hunt, J. and Truong, D., (2019). Low-fare flights across the Atlantic: Impact of low-cost, long-haul trans-Atlantic flights on passenger choice of Carrier. Journal of Air Transport Management, 75, pp.170-184.
Klophaus, R. and Fichert, F., (2019). From low-cost carriers to network carriers without legacy? Evolving airline business models in Europe. In Airline Economics in Europe. Emerald Publishing Limited.
Kuljanin, J.G., (2019). A model for air transport market competition assessment: airline and alliance perspective. Универзитет у Београду.
La, J., Bil, C. and Heiets, I., (2021). Impact of digital technologies on airline operations. Transportation Research Procedia, 56, pp.63-70.
Loh, H.S., Yuen, K.F., Wang, X., Surucu-Balci, E., Balci, G. and Zhou, Q., (2020). Airport selection criteria of low-cost carriers: A fuzzy analytical hierarchy process. Journal of Air Transport Management, 83, p.101759.
Loh, H.S., Yuen, K.F., Wang, X., Surucu-Balci, E., Balci, G. and Zhou, Q., (2020). Airport selection criteria of low-cost carriers: A fuzzy analytical hierarchy process. Journal of Air Transport Management, 83, p.101759.
Reim, W., Sjödin, D. and Parida, V., (2021). Circular business model implementation: A capability development case study from the manufacturing industry. Business Strategy and the Environment, 30(6), pp.2745-2757.
Sezgen, E., Mason, K.J. and Mayer, R., (2019). Voice of airline passenger: A text mining approach to understand customer satisfaction. Journal of Air Transport Management, 77, pp.65-74.
Wanke, P., Antunes, J.J.M., Correa, H.L. and Tan, Y., (2021). Strategic fit of mergers and acquisitions in Latin American airlines: a two-stage DEA approach. Benchmarking: An International Journal.
wttc.org (2021), Economic Impact Reports Available at: https://wttc.org/Research/Economic-Impact [Accessed on: 1 November, 2021]
Assignment Services Unique Submission Offers:
