Fictional airline Company – Tryanair Glossary Executive Summary Conclusion Appendix Bibliography Executive Summary The issues facing Tryanair in today’s highly competitive industry environment represent serious competitive facets impacting the battle for customers in the face of fierce competition, operating costs and security concerns. It includes new aspects that have been bubbling just below the surface and have come to the forefront which must be addressed to turn disadvantages into advantages. The company has recently come under pressure from the major carriers utilizing the legal system to contest its arrangements with smaller airports, as well as the growing pressures to levy a tax in response to environmental issues regarding the increased level of CO2 emissions and the elimination of short haul flights. The preceding, is in addition to the highly competitive state of the industry, represent areas that need to be addressed as part of a Public Relations Campaign that is in consort with broader business related strategies and policies. Since the company is engaged in the business of the transport of customers, public opinion represents an important part of the our image, and as such can be utilized to help mitigate the potential impact of the foregoing as well as aid in garnering support from opposition groups, the general public and the media through the utilization of a coordinated Public Relations Campaign to bring Tryanair into contact with:
The foregoing Campaign will be developed with the understanding that its implementation will also have to be mindful as well as adhere to the company’s corporate social responsibility mandates, as well as the interests of our stakeholders and shareholders. A pro-active stance on these issues is important to bring the company’s side of these issues into the public arena to not only balance the facts, but the arguments as well for these measures which is presenting facets from their perspective. In keeping with the aforementioned, varied studies and passenger feed back has alerted the P.R. Department that the following are issues as well:
Rather than view the preceding as disadvantages, the view of the Public Relations Department is that these areas represent areas of opportunity which can be utilized to enhance Tryanair’s image and well as mitigate the potential for negative legislation and other proposals. What is called for are Public Relations measures that coordinate with the overall strategic plans for the company to achieve growth as well as solidify its position within the industry for the future. These aspects call for a forward looking approach that build upon itself. The P.R. Department has been provided with a budget of 100,000, which excludes internal staff costs, to develop and implement an effective campaign to mitigate the negative potentials of the foregoing. This document shall detail the Department’s plan to achieve that result. The Public Relations Department has prepared a campaign to address the indicated issues within the contexts as outlined in the Executive Summary, and will expound upon them in this segment to provide background information which has been utilized to design said campaign. To re-cap again, these areas are:
The approach to these areas has been formulated utilizing an analysis of our competitors to assess the present day factors to consider in the adoption of a comprehensive as well as effective methodology. The preceding has been crafted with the consideration that it is the objective of Tryanair to become the industry leader in terms of passenger traffic by our twentieth anniversary in 2012. Said Campaign will establish foundational strengths from which successive Public Relations plans can be built upon to assist the company in the attainment of that objective. In order to arrive at that goal, the Public Relations Department conducted a competitive analysis in order to provide a clear picture of the environment Tryanair operates in, as well as where we stand in relationship to the industry.
Through the utilization of a SWOT (Grant, 2005, p. 13) and PEST Analysis (Williamson et al, 2003 , pp. 85-86), in conjunction with Porter’s Five Forces (Christensen et al, 2004, pp. 30-49), we were able to determine the following:
Tryanair does not have any significant or distinct competitive strengths that are not already present within the industry in some form or another. Easyjet, and Ryanair both operate within our industry segment as United Kingdom based carriers, offering similar fares, routes, and services.
The weakness that Tryanair has in the market is that Easyjet and Ryanair are both established for a longer period and have larger financial resources as well as more destinations they fly to. And while Tryanair also faces competition from other domestically based budget and discount carriers, their relative newness to the market is basically on a par with our own. The negative publicity the company has received concerning our charging a fee to wheelchair bound passengers, as well as some of the company’s practices with canceled and delayed flights are areas that have impacted our public image and need to be addressed. Ryanair represents more direct competition than easyJet as Ryanair flies to the same airports, secondary, to control costs (Edgar, 2006). EasyJet’s business model emphasizes the business and leisure class segment (easyJet.com, 2003). There are approximately fifty carriers operating in our segment of the industry (Wikitravel, 2006).
As is the case with all of our competitors, opportunities exist in the expansion to foreign destinations, as well as the adoption of a more progressive ‘frequent flier program’ patterns after Southwest Airlines, which is termed ‘Rapid Rewards’ (Southwest Airline, 2006). Ryanair’s (2006) internet web site does not indicate they have such a program, frequent flier, nor does easyJet (2006). Industry airline travel growth forecasts indicate a rise in passenger traffic to 125 million individuals by 2015 (Britt, 2003).
The potential threats facing Tryanair are the entry into the market of more discount and budget based airlines, particularly from the major carriers who have the financial resources as well as administrative and industry connections to delve into the low fare battle. The threat of entry by a new carrier is also a possibility, however Tryanair’s established operations provide an edge in that these type of circumstance.
The government’s proposal under the Civil Aviation Bill (Department for Transport, 2005) proposes that airports be provided with the powers to set charges to carriers based upon emissions, supported by the Secretary of State. The preceding represents the most pressing of legislation Tryanair and the industry is faced with. The other political legislation and or issues active at present represent aircraft noise, contributions to the Aviation Health Unit, and route licensing cases.
Fuel represents the major expenditure in the industry, representing 15% to 40% of operating costs (Ray, 2005) with oil prices spiraling, and thus cutting into operating margins, the prospect of additional charges, such as the emissions levy, would force Tryanair as well as other carriers to raise fares to offset the expense. Economic forecasts do not indicate a recession or other event in the future, however, the costs associated with security are an additional cost since September 11th.
The airline’s external image with the public has undertaken a negative turn with the publicizing of the fee’s we charge wheelchair passengers, as well as the policies regarding flight cancellations, delays and schedule changes. The state of our customer relations is behind our two main competitors, easyJet and Ryanair.
In this category Tryanair ranks on an equal footing with our rivals in airframe age, check in procedures, IT structure, ticketing and other external as well as internal functions.
The area where Tryanair could potentially suffer in the future is in airport arrangements for expansion of services as well as current destinations as a result of closer governmental scrutiny over subsidies and emissions policies. Our internal suppliers of various services, and equipment do not represent any threat to operations as there are numerous suitable replacement choices.
Given the high costs of equipment and logistical factors as well as the tight operating margins and high number of carriers in the industry, the barriers to entry for completely new carriers are high and should remain so over the foreseeable future. However, such costs are within the financial capabilities of major carriers who have the planes, staffing and administrative systems. The potential for additional entrants from that quarter are relatively mild to high as a result of the industry market shares the discount and budget airlines are achieving.
The threat of substitutes is relatively high from full service carriers seeking entry into the discount / budget segment of the market as a result of the high traffic patterns and yearly increases in revenue miles. As price represents the key reason most customer select one carrier over another the levels of competition leave little distinction between each other in customer minds (Appendix 1, AvantGo, 2003) (Appendix 2, Wessels, 2004, p. 9).
Buyer power is high in that they have the option to select a carrier in this segment, discount/budget, based upon offers available and price (Appendix 2, Wessels, 2004, p.9).
The competition in the discount/budget segment of the market is intense as it is based upon price with little brand loyalty.
The ‘Competitive Analysis’ has pointed out some areas of potential opportunity open to Tryanair, based upon a Public Relations campaign in consort with internal strategic plans to aggressively attack the following areas:
The following summarizes the key issues and components of these areas:
The European Union’s commitment to reduce greenhouse gas emissions by an eight percent in keeping with the Kyoto Protocol commitment period of 2008 through 2012 affects the United Kingdom and the airline industry in that all member states must adopt a National Allocation Plan (defra, 2006). The Emissions Trading Scheme represents the U.K.’s plan to control emissions by setting limits by industry (airapparent, 2006). In consort with the public and national clamor over emissions, the following groups represent areas that will be targeted for P.R. activities through direct communications as well as information dissemination;
This organization states that the United Kingdom generates 2.3% of the world’s CO2 (Friends of the Earth, 2006) and supports airline payment per flight to pay for emissions controls as well as a reduction in flights.
represents an organization of concerned citizens that opposes the Emissions Trading Scheme fearing that the airline industry will take a disproportionate share of the allocation in emissions reductions achieved by other industries (airapparent, 2006).
This organization advocates the taxation of airline flights (National Society for Clean Air, 2006).
This organization is an information network representing environmental organizations and welds considerable influence on a national scale (GreenSkies, 2006). Assistance with the preceding will be cultivated through meetings and associations with private as well as governmental groups and associations to broaden the exposure of campaign parameters as well as gain support for our approach.
This organization is a charity working in conjunction with the public sector, business and other groups to accomplish the objective of building a sustainable future (form for the future, 2006).
These represent the regional airports Tryanair utilizes which are under fire from environmental groups as well as the government regarding the possible use of emission levies and reduced traffic. The last issue they share in common with the airline industry as the new flight traffic has increased their revenues and local business as a result of the additional passengers. These airports are also under fire regarding noise emissions, as well as additional road traffic in their locales, the following Table shows their growth record over a three year period: Table 1 – Regional Airports (BBC News, 2003)
Through a change in our policies for wheelchair bound passengers, Tryanair can mitigate the negative publicity through contact and suggestions from wheelchair bound passengers on things they would like to see on flights. Getting these groups involved gets the word out and creates inside ‘buzz’ on Tryanair’s active stance. This aspect of the campaign activities would cover the following organizations (Edmond.com, 2006):
The varied external forces impacting our industry, such as weather, security, and equipment can necessitate changes in flight schedules as a result of unforeseen events. Recognizing this as an aspect of our business and including it in a program that encompasses other unforeseen variables would help to create better customer relations when these instances arise.
This represents the second business / passenger area that is based upon unforeseen occurrences, and will be a part of the program developed for schedule changes to simplify customer understandings and internal administration.
The last two areas as well as the normal functions of customer service represent a means to increase Tryanair’s bond with customers so that those who have flown with the airline will tend to think of us first in their next travel plans, rather than continue price shopping. Remembering that almost all of our passengers have flown with another airline is an opportunity to gain a semblance of loyalty through heightened customer service and interaction. The approach to meshing these seemingly diverse issues and areas into a comprehensible Public Relations Campaign that the public will grasp in the face of extensive media clutter, will be based upon the application of some well founded theories. Our function as the company’s Public Relations Department, in keeping with established principles as set forth by the Arthur W. Page Society (2006), an organization of select senior public relations / corporate communications officers, which espouses that the P.R. operation is a function in the sphere of executive management and that it is a key component in the success of corporate strategies and planning. The Arthur W. Page Society (2006) advises that through telling the truth, the company lets the public know what is occurring and helps to “… provide an accurate picture of the company’s character, ideals and practices” (Arthur W. Page Society, 2005) and sets forth the following methodology to accomplish an effective and believable campaign:
According to the Arthur W. Page Society (2006), the public’s perception of a company “… is determined 90 percent by what it does and ten percent by talking”
Understanding what the public wants and needs represent a cornerstone of reaching them through programs and actions they understand.
Understanding issues, trends and events that are shaping themselves aids in pre-planning and generates goodwill through the ability to anticipate and plan for these variables in advance.
All of the actions and strategies of the company have an impact in their image and standing with the public, thus policymaking and planning needs to be weaved into other company functions to create seamless external views of consistency, as the public’s perception is based upon 90% of what we do.
The benefits that can be achieved through well planned and coordinated public relations activities are founded in a consistent approach to contacts and information dissemination. The age old adage that cooler heads prevail, remains true in this case. The preceding has been included as a reminder that as a high profile company dealing with sensitive and important issues, Tryanair is subject to intense scrutiny by our rivals, the media, concerned organizations and the public. The recognition of being consistently under the microscope and acting in a manner that eliminates negative feedback from P.R. and corporate actions is a critical component to increase public trust and believability. The preceding factors will thus make statements, policies, programs and promotions that much more effective.
In order to achieve results with the varied issues and concerns facing Tryanair:
the company needs a recognizable and memorable theme which will provide recall as well as consistency for the varied objectives and individual components under the overall campaign. The slogan “You Fly, We Listen” is based upon the preceding as well as the important principles of ‘customer centric’ operations which states (Bosworth et al, p. 2): Traditional Approach Customer Centric Approach Make presentations Converse situation ally Offer opinions Ask relevant questions Focus on relationship Focus on solution Gravitate toward users Target customer profiles Rely on product Relate product usage Attempt to sell by Empower customers to – convincing/persuading – achieve their objectives – handle objections – solve problems – overcome resistance – satisfy needs The slogan ‘You Fly, We Listen’ is a shortened version of ‘You Fly, BECAUSE We Listen’. The subtle change is to make the slogan flow better as well as to place the suggestion in customer minds through reinforcement as well as actions that Tryanair does listen and act upon what we hear. In implementing this in the Public relations campaign, Tryanair will utilize the following processes and steps in each segment of the overall campaign strategy:
The P.R. Department will prepare a topic agenda consisting of data on CO2 emissions utilizing the latest statistics. Defra (2005a): Table 2 – Carbon Dioxide Emissions by Region Total emissions (million tones carbon dioxide)
|Region||Industrial & commercial||Domestic||Road transport||Total|
|Yorkshire & Humber||31.5||13.9||11.2||57.8|
|East of England||18.2||15.7||13.4||49.7|
Defra’s (2005a) information advised that the typical ranges for emissions by category in a local authority range between the following spreads: – Industrial and commercial 29 – 43% – Domestic 27 – 38% – Road Transport 19 – 32% Of the preceding emissions breakdowns, defra (2005b) reported that 44% of the emissions in local authority areas are from industrial and commercial sources, with 29% attributed to the domestic segment and 23% attributed to transport, consisting of vehicles, trucks and cars, and airplanes. The following survey, as conducted by Accenture (2005) provides information on findings, as well as an analysis of travel preferences by UK respondents. The survey found that:
The survey indicated that 52% of respondents utilized their cars for business trips inside of the UK, 30% used air transportation, 16% traveled by train, with 2% indicating other. The preceding data was correlated for business trips exceeding 300 miles. Surveys have found that transport via vehicle, usually with one individual, is the highest CO2 emission generator. In conversing with opposition groups, having detailed information on such areas, reminding them that we are in a customer business that is dictated by customer wants and needs. Additionally that we as a carrier are here to service the needs of the public, and through competition prices are lowered which serves the public interest. Communicating that Tryanair is also concerned about CO2 emissions as the company is comprised of people who like them live in the UK, and is tackling the problem through orders for the latest fuel and emissions efficient airframes shall be aspects included in these discussions, along with other areas The point of the active dialogue and information exchange is that these environmental groups do not get any interaction or communications on a one to one friendly basis. The object of the approach is not so much to change their minds, but to get public exposure of the company’s interest on the issues and a willingness to meet with groups for discussions and dialogue. The objective is to steal the thunder from any other carriers who might see the overall positive benefits from such an approach. In addition to hearing the other side of the story, suggestions and ideas could be solicited and discussed with said groups and internally we can then seek potential solutions were fiscally feasible, with feedback provided to the public and through joint press releases. Ignoring these environmental groups is not the answer as their strength and public voices have become increasing larger, and with the power of the Internet as well as the recent attention that has been focused on this matter, their influence is such that ignoring them could prove disastrous. The suggestion of donation contributions to plant trees in emission areas represents another proactive stance which is cost effective in actually doing something concerning the problem, rather than just talk. Under a ‘NOW Green’ program the company could set up a fund for these donations that selected environmental groups can access to places trees where they elect, rather than where the company decides. This releasing of conditions into their own hands gives these groups greater input and should translate into at least a climate of cooperation rather than the present adversarial environment.
The P.R. Department, as in the prior case, feels a proactive stance is the preferable strategy in addressing the company’s lack of vision concerning the handling of its wheelchair passengers. It is recommended that all flights and personnel are properly trained on the handling of wheelchair bound individuals. In addition it is recommended that the company actively support, through sponsorships, athletics events conducted by the following associations.
In addition, the company should actively seek out prior wheelchair bound passengers to survey their experiences and solicit ideas and suggestions, offering any dissatisfied respondents 50% off on their next flight. The preceding with generate ideas from this segment of the population as well as aid in repairing poor relationships as well as providing press release opportunities.
It is obvious that the company needs to improve its system for notifying customers of fight changes to improve customer satisfaction. This can be achieved through telephone notifications as well as emails. The company should implement a policy similar to Southwest Airlines Rapid Rewards, calling it ‘Tryanair Now Rewards’. The ‘NOW’ refers to passengers receiving faster points for more reasons. A flight change whereby the passenger does not have the option of changing to a new flight within six hours would carry a reward point equal to 1/3rd of the ticket price. This means the passenger has a reason to stick with Tryanair for points build up and sooner reward utilization.
The same methodology should also accompany flight delays and cancellations. The fact that customer will be unhappy is mitigated through awarding points to retain them in the future, with customers able to use their reward points at any time, meaning if they have 10% of a flight’s cost in reward points they can redeem them NOW, hence the term. The P.R. benefits are obvious, as are the benefits to passengers who realize they do not have to make a long list of flights before they qualify. The preceding should pull more customers to Tryanair.
The “You Fly, We Listen” slogan and ‘NOW’ rewards program have a consistent theme in that the company does ‘Listen’. This platform needs to be a part of Customer Service whereby agents have discretionary power to issue on the spot reward points up to 20% for highly dissatisfied customers as well as circumstance meeting certain criteria. The aforementioned standard rewards for flight changes and cancellations are within those parameters. The preceding is part of the ‘NOW’ aspect of the “…We Listen” slogan to make the message take shape in actions, as emphasized by the Arthur W. Page Society (2006):
These foundations are the cornerstones of the new slogan and rewards program.
The discount / budget airline travel segment is highly price conscious. However, as a company, Tryanair can not view its relationship with the general public as well as passengers from the price shopping perspective, otherwise it runs the risk of developing a brand franchise is primarily comprised of customers that utilize the airline only when price suits them. Tryanair needs to go further than simply price, it needs to actively engage in a relationship with the customer that is now based, meaning when they think of Tryanair the will be presented with the idea that we care about them ‘Now’ and see to their needs, ‘Now’. Given all the choices customers have for air travel, now represents their state of mind, which should be reflected by the manner in which the company works in a customer centric mindset. Generating the preceding programs is estimated in terms of man hours, press releases and meetings under the ‘NOW Green’, wheelchair sponsorships and ‘NOW’ rewards will constitute the utilization of the 100,000 with the costs of administering these two programs managed under advertising and promotions. Records regarding the number of customers using the ‘NOW’ rewards program will provide a gauge for its effectiveness, remembering that rarely is a flight filled to capacity, thus providing the means to fly these passengers and in reality aid in the fuel efficiency. Conclusion The nuances of the highly competitive discount / budget segment of the airline industry create a unique environment in terms of customer relationships as it is based primarily on price. This ‘cash and carry’ mentality permeates the industry segment with budget airlines garnering 54%, easyJet, 54%, Buzz, regarding the passenger who had flown with the airline who would recommend it (Guardian Unlimited, 2003). These are important figures, as a brand franchise is only as valuable as the customer who recognize and use it. The underlying aim behind the Public Relations Campaign is to:
The Public Relations campaign themes, programs, approaches and direction indicated in this report are crafted to put Tryanair into contact with adversaries, as well as satisfied, dissatisfied and all levels in between of passenger who use the airline. The utilization of proactive measures will communicate the message that Tryanair does something about problems, because “… We Listen” Appendix Appendix 1. AvantGo – Passenger Survey
|What drives your Airline purchase decision?||Price Schedule Convenience FF Miles Customer Service N/A||651 162 94 95 16 40||62% 15% 9% 9% 2% 4%|
|For personal trips, how do You generally buy travel?||Online Phone Travel Agent Other N/A||785 63 130 23 57||74% 6% 12% 2% 5%|
Appendix 2. Wessels – Why Passengers Select an Airline 5 is the Scoring Scale (Wessels, 2004, p-9)
|On time arrival||3.6|
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