航空工业案例研究——澳大利亚维珍蓝航空公司的业务

1990年10月30日,澳大利亚航空公司的规定,取消终止“two-airline”政策(2001年Sinha)。之后,其他航空公司都坐视如虎,维珍蓝色和捷星进入澳大利亚航空市场，共同瓜分这个份额巨大的“蛋糕”。

摘要Executive Summary

To appraise the strategy of Virgin Blue is whether reasonable or not, the environmental analysis and competitive analysis are analysed and criticized. The findings of this report highlight that the strategy of Virgin Blue that continuously provides low-cost and airfare is quite easy to get competitive advantage, especially as the price of global fuel is so sky-high that a large number of other airlines have to enhance ticket price. However, high price of fuel is also an enormous threat for Virgin Blue. Consequently, there are some recommendations that Virgin Blue should improve: establishing operation system in organisation, which improve employees’ productivity and reduce costs.

 

引言 1. Introduction

 

背景 1.1 Background

 

On October 30 1990, Australia cancelled the regulation of airlines, which terminated the ‘two-airline’ policy at the same time (Sinha 2001). After that, other airlines such as Tiger, Virgin Blue and Jetstar entered into Australian airline market to share the big “cake”. Australian airline industry has three areas: domestic, regional and internal. In domestic trunk route category, Qantas, Ansett, Virgin Blue and Impulse Airlines formed “four-airline” structure (Kain and Webb 2003). Then, in the regional airlines, there are three airlines: QantasLink, Virgin Blue and Regional Express accounting the market share. Also, in the international airline industry, there are 50 airlines operating in Australia, and Qantas is the only one airline in Australia, which occupied the market portion about 34% in 2002(Kain and Webb 2003). However, Virgin Blue planned to provide international service as well, which will lead the intense market competition.

 

目标 1.2 Aims

This report aims to analyse the strategy of Virgin Blue based on the analysis of SWOT in Virgin Blue and general and task environment in Australia’s airline industry and provides some recommendations for Virgin Blue.#p#分页标题#e#

 

报告的结构 1.3 Structure of Report

This report includes four parts: introduction, which provides background of airline industry in Australia, environmental analysis of airline industry, which contains general and task environment, and then competitive analysis, which using mode of SWOT to analyse Virgin Blue and Strategic analysis in Virgin Blue according to environmental and SWOT analysis. 1.4 Conclusion from the research

The task and general environments have an enormous impact on price of airfares, cost of management, number of airlines, market shares. Virgin Blue insists on right direction of the low-cost strategy and should improve the productivity by using operation system and building up the strategic alliance with other airways.

 

航空业的环境分析 2. Environmental Analysis of Airline Industry
 

这一节的介绍 2.1 Introduction of this section

In this section,  the report will analyse the elements in general environment which includes technological, economic, sociocultural, political and legal, demographic and global forces.  The factors in task environment, such as suppliers, distributors, competitors and customers, affect managers’ daily performance. In the end, the analysis of all factors in general and task environment will be summarized, which to study the effects of environment in all competitors in airline industry.
 

航空业的一般环境分析 2.2 General environmental analysis of airline industry

The technology in management means making tools, machines, computers, skills, information and knowledge work together to help managers in design, production and marketing goods and services (Waddell et al. 2007).  In Australian airline industry, the technology is used to help managers to reduce the cost and provide more convenient services. By using the Amadeus Web Service, Australian airlines can build up and update new application in their websites to provide online booking service (Amadeus Benelux 2007), which increases the efficiency of management of tickets. Meanwhile, to avoid the terrible terrorists’ attractions, the new methodology risk management is introduced, which is used to increase level of safety and ensure the secure journeys. Therefore, technology provides convenient ways and promotes the business in airline industry.

The economic factor includes interest rate, inflation, unemployment and economic growth, the definition of this element id national and regional economic health and wellbeing (Waddell et al. 2007) is another important element for Australian airline industry. In booming economic conditions, Australian airlines industry has more passengers and profits. But in depression time, the economic condition provides the more complex situation to managers. For example, the increasing fuel price in 2008 was a threaten to Australian airline industry. Because of the increasing cost, airlines had to surcharge the fuel payable on all tickets to maintain the profits.  As a result, the whole airline industry reduced numbers of routes and services, which caused the low profits in 2008(Toth 2008).#p#分页标题#e#

The third element is sociocultural force, which means the pressure comes from the culture of nation, society and composition of country (Waddell et al. 2007). The pressure from society has power to facilitate the operation and behaviours of managers. Union collaborate is an important factor in sociocultural forces gives the pressure on Australian airline industry. Such as the Union collaborate in Qantas, which gave the pressure on Qantas to minimize the working hours, change the longstanding working conditions and make the more flexible workplace (Cook 2008). These requirements will cause the higher cost in management of Qantas, and gives the negative effects on competition. Thus, the sociocultural powers increase the cost of management in Australian airline industry.

After that, the political and legal forces give the deep impression on Australian airline industry; the definition is the changing in laws and regulation in industry, such as deregulation of industries (Waddell et al. 2007).The political and legal systems create the opportunities and threaten to organisation and managers. For instance, the Australian foreign investment policy stipulates the Australian airline must compete 100% of foreign-owned airline, and the international airlines must be owned by Australia (Wastnage 2008) Therefore, the Lion Airline had to choose one of Australian airlines to cooperate with, which caused Lion Airline cannot share the all profits and capacity of competition reduced. 

Demographic forces are consist of age, gender, ethnic origin, race, sexual orientation and social class, which are outcomes if changes in, or changing attitudes towards and characteristics of population (Waddell et al. P94 2007). To ensure the safety of voyage and reduction of cost, the peak-age of  pilots were 35-44 (McPherson 2009), these pilots were full of energy and  Thus, airlines need not to spend much cost on health insurance of old pilots to reduce cost of management.

The last force is global factor, which results the varying of national economy, political and legal system, and international relationship (Waddell et al. 2007).  The changing global situations give the new challenges and opportunities to help global organisations to integrate the global resource.  To Australian airline industry, the global airline alliance is the best platform to help airlines in Australia to enter into international market. For instance, oneworld alliance is the global airline alliances, which enhances the cooperation of each member and share benefits (Qantas 2009). By sharing codes and jointing operation of air lines, members of oneworld alliance provide flights to 675 destinations, which offers the largest range of services and maximize profits. 

 

航空业的任务环境分析 2.3 Task environmental analysis of airline industry

Suppliers, which can be individuals or companies, provide the input resource to organisations. (Waddell et al. 2007) When the suppliers provide the sole source, the suppliers are in strong position. When the organisations have large number of suppliers, the companies can implement the low-cost and high-quality strategy (Waddell et al. 2007).  To Australian airline industry, the price of oil is the key factor, because the OPEC holds the strong position to bargain with different industries and dominate the world economic fluctuation. According to IBISWorld estimation, due to the high price in air fuel, the growth rate of profits in Australian airline industry will be only 2.9% (Bryant 2008). Meanwhile, the high price of oil makes the shrinking of market in Australian airlines. For example, the Tiger Airways is a low-cost airline, the main share of market focus on low side clients. When the price of fuel increased in 2007, which threaten the market of size of low-cost airlines (Bryant 2008), and Tiger Airways had to increase the price of tickets, and the low-cost strategy would be failed.#p#分页标题#e#

Distributors are organisation, which help other companies on marketing service and products (Waddell et al. 2007). The distributors give the threats and opportunities to organisations. The large size of distributors can threaten the corporation to reduce the price. When there are many options to organisations, the positions of distributors are weakening (Waddell et al. 2007). In Australian airline industry, the travel agencies are the distributors of airlines, which have the tickets booking services to help Australian airlines to extend the tickets selling. Such as the Flight Centre, this is an Australian travel agency. By retailing the different kinds of services about Australian airways (Flight center n.d.), flight centre becomes an important distributor in Australian airline industry to help them to market airfares and travelling services.

Another important factor in Australian airline industry is competitor, which can be organisations and provide the resemble services and products (Waddell et al. 2007). In Australian airline industry, the increasing competition between each airline leads to managers have to seek new resource. Meanwhile, the competition in airlines industry promote all airways to provide better service and lower-price airfares, which offer more benefits to customers indirectly. For instance, Virgin blue, as a new competitor, to contend with Qantas to gain more market shares, insisted on low-price airfares, this action made the more competition in Australian air travel (Asia Pulse 2001).  Then, the potential competitors increases in Australian airline industry, the potential competitors which are the organisations that will enter in the task environment (Waddell et al. 2007).  The Virgin Blue would enter into international lines business by linking with Virgin Atlantic flights (Kain & Webb 2003), which would become another competitor with Qantas in international business.

The last factor is customers, which can be the persons or companies purchase the products of another organisations (Waddell et al. 2007). In Australian airline industry, about 72.02% of customers chose Virgin Blue (28.53%), Qantas (27.68%) and Jetstar (15.81%) (Hitwise 2007). After that, face to Australian increasing competitions in airline market, Virgin Blue and Delta Air line announced to set up alliance, which would extend the ability of operation in Virgin Blue and Delta airline. Meanwhile, the alliance between Virgin Blue and Delta would promote the efficiency and gain more passengers in the following years (eTN 2009). From the example above, to get more market share and new customers, Australian airline industry open up new market by allying with foreign airways.

 

From analysis above, the general and task environments are the crucial factors to Australian airline industry, technology provide Australian airlines new method to sell airfares, the price of oil effect the price of airfares, the labour union requires airways to provide flexible workforce, which the companies have to pay higher cost on management, then the political force limit number of airlines and set barriers to new enters. After that, the demographic force such as using more pilots whose age from 35 to 44, to reduce the cost of management and voyage. The global force offers opportunities to Australian airlines to integrate the airline industry. Suppliers force such as price of fuel, which influence the low-cost strategy of some airlines, the distributors help Australian airlines to market airfares, the competitions between airlines give the better service and lower price to customers, and according to set alliance, airlines in Australia can extend market and get more passengers.#p#分页标题#e#

 

维珍蓝的背景3.1 Background of Virgin Blue

Virgin Blue that was launched on 31 August 2000 is an Australia low-cost airline and Australia’s second-biggest airline, which has approximately 32% of the domestic market and operates over 2,400 flights a week to 24 Australia’s cities and regional destinations (Vaustralia 2009). Virgin Blue has 20 largest shareholders who totally possess 995,723,070 ordinary shares and during the period of 2008, it carried 9.24 million passengers and the total assets of Virgin Blue was 3,337.9 million dollars, which dramatically increased about 44.8% comparing with it in 2007. However, the net profit of Virgin Blue was only 97.7 million dollars, which strongly decreased approximately 54.7% in comparison with it in previous year (Virgin Blue annual report 2008). This intense drop in profit probably due to globally high fuel price and some weakness in internal environment and threats in external environment, which specifically discuss in following SWOT section.

 

（优势、劣势、机会、威胁）分析3.2 SWOT analysis

There are several numbers of potential strengths in Virgin Blue. In the first place, Virgin Blue is a low fare and low cost airline in Australia (Virgin blue 2009). For example: the cost of flying Virgin Blue seems to be about 25%-30% less than comparable routings on Qantas (Virtual Tourist 2009). In 2003, budget airline Virgin Blue had been voted the world’s Best Low Cost Carrier in a web survey of travellers (AAP General News 2003). The main reason of Virgin Blue that keeps low cost as well as ticket price is that it focuses on a limited range of aircraft, such as: Boeing 737s; use airports, which are service cost cheap, such as: Coolangatta; provide low-cost ticket booking via the internet as well as cut a large number of aspects in in-flight service cost, such as: food, drinks and some entertainments (Clitheroe 2008). Furthermore, Virgin Blue is the best customer service among the Australia’s airlines. In 2008, Virgin Blue had been doubly awarded the outstanding customer service and presented with the prestigious ‘Best of the Best’ award by  The Customer Service Institute of Australia (CSIA) that is Australia’s peak customer service organization which is driven by and committed to the development of people, system and standards to improve customer service (Virgin blue 2008). Furthermore, the quite unique culture goes around the organization of Virgin Blue, which people recognize it for quality, value for money, challenging the establishment and a fun work environment (leader 2009). Last but not least, Virgin Blue has an extremely strong brand-name reputation. According to the Harris Interactive Corporate Reputation Survey (2007), Virgin Blue had been voted as one of the top five companies in the Harris Interactive Inc Survey that provides clients with this accurate knowledge will help them achieve measurable and enduring performance improvements of the nation’s most reputable firms with 4th place ranking for both the 2005 and 2006 annual surveys.                                  #p#分页标题#e#

 

 The weakness of Virgin Blue is that it has a limited range of routes, what is meant by this is that it just concentrates on some high-density routes and not operates a more traditional route system of a nationwide. In order to solve this problem, Brett Godfrey (2008, n.p.) who is Virgin Blue Chief Executive said: “We strive to make as many global destinations available to our guests as possible whether by opening up  new routes of our own or through strategic arrangements with quality airlines and we look forward to adding PNG to our expanding network.”  Another negative aspect of Virgin Blue is their schedule. For instance, Qantas that Virgin Blue’s main competitor in Australia’s airline provides more non-stops and fewer connections for points all over Australia, which indicates it is much more time-consuming than Virgin Blue provide (Virtual Tourist 2009). 

 

There are also a wide range of opportunities to Virgin Blue. In begin with, Virgin Blue can increase its image and passenger number because of it is able to create programs related to protect or reduce carbon emissions. In 2007, Virgin Blue had became first airline in New Zealand to support government green project that reduce CO2 (Fratfiles 2009). Secondly, Virgin Blue is developing business market, which focuses on serving the leisure travel market and regional airports and secondary metropolitan airports (Fratfiles 2009). For example, recently Virgin Blue has launched four new routes, such as: from Townsville to Cairns, Gold Coast and Canberra (Travel News 2009). Thirdly, Virgin Blue gained the significant contract with John Holland Aviation Services (JHAS), which provide Virgin Blue new type of aircraft and maintain the quality of flight to get competitive advantage (Invest Victoria 2009). The 19 E-jets that Virgin Blue currently own expect to grow to 23 by the end of 2011 (Invest Victoria 2009). Finally, improvement in IT system can make customer more convenient to book ticket via Virgin Blue’s website (OPPAPERS 2009). 

 

Recently Virgin Blue encounters an increasingly number of threats. Firstly, Virgin Blue may have to lift the fuel surcharge on airfares due to increase dramatically in the price of crude oil that goes above 100US dollars per barrel (HighBeam 2009). This increase in ticket fare is harmful to main advantage of Virgin Blue that low cost and fare comparing with other airlines in Australia and also further lead to loss-making expansion (McLennan 2008). What’s more, a large number of competitors in overseas are planning to be business in Australian domestic market. For instance, Singapore-based Tiger Airways, which a pure low-cost airline, is moving on to Australian domestic routes (GLOBALSPEC 2007). As a result, more international airlines go into Australia, the less market share that Virgin Blue possesses. In addition, Jet star and Qantas and other Australian airlines also offered low-cost tickets, which compete Virgin Blue for Australia market share. For example, Qantas provide some special business, such as: Qantas Holiday’s, which include a range of package deals and offers (airfaresflights 2009). Finally, recently poor economic condition has an enormously negative impact on Virgin Blue’s business. Virgin Blue have to raise 231 million dollars strengthen its balance sheet when approximate 50 of the world’s airlines have collapsed and passenger numbers drop down fiercely during the financial crisis (ABC News 2009).#p#分页标题#e#

 

总结的竞争形势 3.3 Summarize of competitive situation

Competitive situation in airline industry has became more and more intense since government deregulated in 1993 (Khvedeliani 2002). The essentially competitive advantage of Virgin Blue that provides low cost and fare has been threaten by an increasingly number of national airlines, such as: Tiger Airways, which break into Australia airline industry with quite low airfare, and domestic airlines, such as: Qantas, which also provides economical ticket recently. Consequently, the market share for Virgin Blue is not as large as before and customers can choose a wide range of airlines with low ticket price rather than choose Virgin Blue only. Furthermore, a large number of new services, such as: point to point service and travel holiday service are provided by those new airlines. As a result, Virgin Blue has become less attractive than before and should improve its service to satisfy customers’ needs.

 

建议 3.4 Recommendation

Due to fierce competition in airline industry, Virgin Blue is supposed to enhance and maintain several numbers of points. Firstly, Virgin Blue should adopt reward principle to motivate employees’ performance and enhance productivity by using modern devices in order to keep basis on low cost and airfares. Secondly, according to customers’ needs, develop valuable new products for their. Thirdly, Virgin Blue should establish partnership with other airlines for share knowledge. Fourthly, providing comprehensive network to customers, which make book ticket easily and give customers a pathway for feedback. Fifthly, Virgin Blue should create more new routes especially some hot holiday cities.      

 

战略 4. Strategic Analysis

Currently Virgin Blue still aims at doing strategy of low-cost carrier through continued improvements and expanding offerings of its low-cost service (Xomba 2008). In order to fulfil this strategy, Virgin Blue adopts five approaches: low fares, which means 75% of seats on a flight are sold at the minimum available fare to boom-up demand; frequent point to point flights on short-haul route, which avoid the costs of providing through service for connecting passengers, such as: baggage transfer costs; decreasing operation costs through reduce personal expense, customer service costs and airport access fees; internet booking through its host reservation system; commitment to safety and quality maintenance, which operates its fleet in a cost-effective manner (Xomba 2008).

 

维珍蓝的评估 4.1 Evaluation of strategy in Virgin Blue

The environment and strength, weakness, opportunity and threat of Virgin Blue have enormous impact on its strategic approach. In spite of more and more competitors, such as: Tiger and Qantas also provide low-cost and fare services, Virgin Blue have more experience that offer low-airfare long time rather than rival has, which indicates employees in Virgin Blue know how to maintain service quality as cost down. However, it is more difficult to keep cost and airfare down in the future because of costs of fuel in globe has became much higher than before, which lead to Virgin Blue have to rise airfare to cover fuel expense. What’s more, Virgin Blue use limited type of aircraft, such as: Boeing 737 to control aircraft acquisition coats, while its competitors utilize diverse sorts of aircrafts to serve customers, which cause those rivals probably more attractive than Virgin Blue.#p#分页标题#e#

 

未来的战略方向 4.2 Recommendation for future strategic direction

In the future, Virgin Blue is supposed to continually use strategy of low-cost and fare to compete its competitors to get market share and attract customers as fuel costs keep going up and provide a broad type of flights and more services. The essential approach of reducing costs is managing its operation costs, what is meant by this is that Virgin Blue should establish a complete operation system in organisation, which control personal expenses by enhance workers’ productivity and improve the organisation’s quality of products. Operation system is responsible for three stages of production: acquisition of inputs, control of conversion process and disposal of goods and services, which increase quality, efficiency and responsiveness to customers and so give an organisation a competitive advantage (Waddell et al.2007, p.456). Because of increasing quality can lead to increase productivity, which cause low costs (Waddell 2007). Consequently Virgin Blue is able to get higher profits based on low airfare although global fuel costs are still high.

 

结论4.3 Conclusion

In conclusion, Virgin Blue should take advantage of its main strength that a low fare and low cost airline in Australia. Also, Virgin Blue should make its services more comprehensively, such as: providing more comfortable aircrafts and more route choices to customers.

 

Reference List文献参考（略）