Case Study sobre la empresa Air Fair.

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Keep company focused on goals and sensitive to public relations.

CMO - Jessica Means

Chief Marketing Officer - Responsible for all marketing and advertising of the company. Hands on Public Relations.

CCO - Ricardo Martin Coloma

Chief Creative Officer - Work together with CMO, responsible for logo design and marketing brand of company. Media and commercials of company.

CTO - Andrew Jones

Chief Technology Officer - Responsible for all technologies of the company. Creating and maintaining relations with supplier and partners.

MARKET RESEARCH

The problem that our company will help solve is to make the airlines more profitable and efficient so that their clients have access to affordable flights and make flying an effortless experience. Airlines are not currently a high profit business, just last year did airlines begin earning profits. According to an article by Alicia Adamczyk, Director General and CEO, Tony Tyler of IATA reports that on averaged airlines retain $8.27 for every passenger carried. Airlines are reported to have a hard-earned averaged profit of 4%. One main contributor to the increase in profit is due to oil costs from 2014 to 2015 decreasing by 36%. Airlines as a whole are projected to earn $29.3 billion for the year 2015. Even though this may seem like a lot of money it is not when you think of this being the annual profit for all airlines. (Alicia Adamczyk 2015).

Competition:

Our company will be based out of the United States and provide consulting services for all commercial airliners. The airline industry is a small market and commercial airliners are an even smaller piece of that market. There are many different marketing/consulting companies available to airlines. Some including Aviation Marketing Consulting, Bain and Company and Simpliflying. These agencies offer services such as branding, strategic planning, trade shows, advertising and PR for all aviation services. While having various services may be attractive for some airlines, the specialization our company has to offer sets us apart from competitors.

Airlines have also done some of the following things to improve customer experience. Jetblue provided a free book vending machine to certain airports. TAM used Facebook profiles to personalize in flight magazines. Jetstar used TV shows to create a new on board meal. Air France lets passengers play a digital waiting game at that gate for a chance to win upgraded seats. KLM lets families and friends surprise loved ones with a “seat cover” greeting. (Kollau, Raymond 2014) All of these ideas increase the customer’s experience but do not limit costs for the airline and the customer.

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SERVICE (PRODUCT) DEVELOPMENT

The two services that AirFair is introducing to the airline industry are Branding and Biometrics. Branding will allow airlines to lower the cost of a flight ticket while increasing profits and biometrics will ease the flow within the airport in order to make travel more effortless.

Branding with AT&T & Amex

Branding, marketing and advertising are perhaps the most important concepts today defining success or failure. In today’s age of startups and social media, absence of advertising or presence of incorrect advertising can certainly cost a fortune. It can either lead to a successful IPO or filing of Chapter 11.

It’s been almost 30 years since airline industry was deregulated. Yet according Berkeley economist and overall airline guru Severin Borenstein, The domestic airline industry has reported negative net income in 23 of 31 years since deregulation and a strongly negative aggregate net present value of earnings (Phillips, Matthew 2011). Here’s where we think our company can add significant value. We want airlines to come up with secondary source of income, which would significantly increase their top line by having a significant impact on their bottom line.

According to emarketer, the global mobile advertising market will surpass one hundred billion in spending worldwide (Media Buying 2015). One of our aims would be to grab a portion of that pie being routed through airlines. According to Bureau of Transportation Statistics, between June 2015 & June 2015, 675 million people have travelled domestically in USA. (Department of Transportation 2014-2015).

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To put this number into perspective – It is almost about 2/3 the people on Facebook and 2.5 times the population of USA. So the question then arises what our plan is, how will the airlines be benefitted and lastly how will this prove to be a boon for the passengers. Let’s take a look at each of them with some in depth analysis.

Let us pick the top airline carrier with whom the big brands would want to be associated with. According to Bureau of Transportation Statistics, Southwest hold the top spot as of June 2015.

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Now let us also pick a few companies spending a significant portion on advertising based on 2014 data. According to Business Insider, following are the top 10 companies that spent the most on advertising in 2014 (O’Reilly, Laura 2015):

- P&G - $4.6bn

- AT&T - $3.3bn

- GM Motors - $3.1bn

- Comcast - $3bn

- Verizon - $2.5bn

- Ford Motor - $2.5

- American Express - $2.4bn

- Fiat - $2.2bn

- L’Oreal - $2.2bn

- Walt Disney - $2.1bn

Which of these companies would spend money on Southwest, why would they do so and how could these companies be associated with Southwest?

We did some research, put some numbers together to show that AT&T & American Express would be willing to make some place for Southwest in their advertising budget. Each of them would be willing to pay $400,000,000 to Southwest annually. The analysis conducted would justify the advertising budget. Let us look