Principles of E-Business – Firefly Airline Background

Introduction

In this assignment, I need to choose one of my favourite e-business website and making some research on the website. I need to identify and explain the online business model used by the website. Besides that, I was also required to describe the type of e-business functionality that is available on the site. Other than that, there will also some comparison of functionality with other different website be done under the functionality. At the end of this assignment, I was also need to provide recommendation on how to improve the website by using some additional e-business solutions.

Firefly Airline background

Firefly Airline launched on April 3 in year 2007. Firefly is under operated by FlyFirefly Sdn Bhd and it is known as MAS Sdn Bhd before. It is a full-service point to point carrier and also full subsidiary of Malaysia Airlines System Berhad. The first head office is located on the Sultan Abdul Aziz Shah Airport in Subang Jaya, Selangor. It claims to be first community airline in Malaysia. There are operating two hubs in Malaysia and they are located on Sultan Abdul Aziz Shah Airport, Subang, Selangor and another hub is located on Penang International Airport. The airline's first flight was from Penang to Kota Bharu. Firefly offers connections to many-sided of points in Malaysia, Singapore, Southern Thailand and Sumatera of Indonesia. They are modulating itself with Indonesia-Malaysia-Thailand Growth Triangle agenda. Although Firefly is 100% owned by Malaysia Airlines, but it separate management. Firefly was focuses on serving dynamic Malaysia, Thailand, Indonesia and Singapore growth region, populated more than 70 million people. Their vision is to be trusted brand known for providing reliable, safe, comfortable and accessible premium travel experiences that with the same feeling with the passengers. Besides that, their mission is to enhance their footprint by providing exceptional services and maintaining their profitability above industry average. Although they continue to manage their routes, they also take pride in aligning their work culture and business model to social conscience. Their future destination is planning to use Malacca International airport located in Malacca to extend their base.

Business Model

Business model is a plan that is implemented by the company to apply and generate revenue and increase profit. In business model, it will include components and functions as well as revenues which the company applies. The business models that Firefly has are business-to-consumer (B2C), business-to-government (B2G) and Lower-cost carrier.

Business-to-Consumer (B2C)

Business-to Consumer is e-commerce model in which businesses sell product or services to the customer. Customer can purchase or booking their ticket in their site. Customer will surf through the Firefly website and booking and make payment their air ticket. Thereby, business-to-consumer happens in this process.

Business-to-Government (B2G)

Business-to-Government is a variant of business-to-business model. Some website is used by government to trade or exchange information with some business organizations. Government will surf to the Firefly site and booking and purchase the air ticket. Some government will chartered whole the flight and thus business-to-government happened here.

Low-Cost Carrier

A low cost carrier or low cost airline, some people known as no frills discounts or budget carrier or cheap flight is an airline that usually has lower fares and fewer comforts. To make up for revenue lost in decreased ticket prices, the airline maybe can charge for extras like priority boarding, seat allocating, baggage and etc.

Aircraft

Most of the low-cost carriers for example like Firefly operate aircraft configured with a single passenger class and most operate just a single type of aircraft. In the past, Firefly tended to operate the older aircraft purchased second hand for example like the Boeing 737. The aircraft must always operate with a minimum set of optional equipment, further decreasing costs of acquisition and maintenance, as well as keeping weight of the aircraft lower and thus saving the fuel.

Bases

Many of the low-cost carriers for example like Firefly develop one or more bases to increase their destination coverage and defend their market.

Non-flight Revenue

Low-cost carriers bring into being ancillary revenue from some of the activities for example like ala-carte features and commission-based products. Firefly for example, generates revenue by courier services and hotels as well as flights.

Limit Personnel Costs

Low-cost carriers are on purpose to be low-cost. So, the employees will work in multiple roles. At some airlines flight attendants also clean the aircraft or work as gate agents. For example like Firefly, check in at the gate luggage requires fees as it requires addition to the weight calculation and baggage handling in last minutes. Online check-in becoming common for Firefly, again interest of avoiding personnel cost.

Principles of Low cost Airline Firefly

• Online check-in
• Have staff do multiple jobs. For example like cabin crew also check tickets at the gate or clean aircraft.
• Do not use reserved seating because it may slow down the loading of the aircraft.
• Carry very little extra fuel because for reducing the weight of the aircraft.
• Hedge fuel costs for example like buying fuel in advance when it is cheap.
• Keep aircraft on the ground for very short time so that can lower airport charges.
• Route planning before aircraft arrives at airport and saving time on the ground.
• Charge for last minutes baggage check in because it will slows down the loading of the aircraft.

Online Travel Portal

The launching of Firefly Holidays which is the country’s first online travel portal, organization of Firefly airline will grows auxiliary income contribution to revenue by 15 percent to 20 percent. It offered packages extended its coverage include more 100 Malaysia Airlines worldwide destinations. Through this portal, customers are given flexibility to select or choose their favored flight timings, hotels and complement their own holidays with optional tours and transfers.

SWOT Analysis

Strengths

Being an assist of MAS, Firefly's begin cost and learning curve in the industry is remarkable reduced. Firefly has introduced renovation product with new routes take into the new markets. It has landing rights and is the one and the only carrier from Penang to the place that famous tourist destinations consist of Langkawi and Koh Samui. Exclusive and particular access to the Sultan Abdul Aziz Shah Airport located at Subang capacitates it to fully capture all of the travelers selecting for this route. The Sultan Abdul Aziz Shah Airport located at Subang is near and closer to the main residential and commercial hotspots for example like Petaling Jaya and Kuala Lumpur compared with another to KLIA. The firefly e-business website is user friendly and the first time user can easy to use it. Firefly payment system is easy and secured and user can feel safe to booking their flight ticket. The firefly e-business website also updates the information especially the flight promotion.

Weaknesses

Beyond doubt Firefly is the new in the business, especially on the part of online sales. Even though the Firefly's parent company MAS was late to introduce its online booking engine only in January 2004. It is be short of the experience in this field if compared with Air Asia. Air Asia was voted as the most popular website for online shopping in survey managed by AC Nielsen Consultancy. As a hub, Subang Airport has its shortcoming though. Exclusive access to Subang removes possibilities of other airline passengers using Firefly in Subang for the connectivity or during stopover. Besides that, the other limitation of the Subang Airport is the lack of a systematic public transport to or from the airport. If compared with the KLIA, there provide Express Rail Link, shuttle buses to city and taxies. Subang Airport just trusts on and relies uniquely on taxies. Furthermore, Firefly website doesn't have provided the search bar to the customers.

Opportunities

Connell has discussed and comment that medical tourism become successful in Asia especially and has point out global interest. In Penang there have 13 private hospitals which Firefly can try to work with the promotion of medical tourism. Firefly has many spokes out of Penang to popular destination with international airlines get through Penang Airport. Firefly can win stopover passengers looking to visit popular destination.

Threats

AirAsia is the main threat of Firefly. The sustaining price war between budget airlines is anticipated to continue reducing into profits. With the overall drop in Asia Pacific air-traffic anticipated to continue, FSCs will think over to join the fight for the budget travelers segment immediately or by starting a subsidiary LCC. Other than that, there are also exists threats of substitute products called bus services, train services and car travel especially the KL-Penang route. For example like Aeroline, a business class like bus service charges around RM60 from KL to Penang trip. It takes around 5 hours to reach the destination if compared to 1 hour by flying.

Functionality

  This is the homepage of Firefly e-business website. The homepage show all of the promotion and information of the flight. User can book their flight on left hand side of the homepage. In terms of functionality, there are available in the Firefly website to help perform day to day operation. Functionalities are being discussed below:  First of all, book flight functionality is the most important and basic requirement for an airline e-business site. There have a small book flight window in the firefly homepage. This small window can allow user easily to booking their flight. User can select their trip is round trip or one way trip.

Then, user can choose their departure location for example like Subang Airport, Penang Airport, Singapore or others. After select their departure location, and then user needs to choose their destination. Then user have to choose their depart date. If the user is choose round trip, then they need to choose their return date. User also can choose their currency for example like Malaysia Ringgit, Singapore dollar, US dollar or others. User also can select the number of adult or infants that travel the trip. There are two options for user to choose is it user needs to travel on the date or user can choose the lowest fare. User need to press on Search Flight button to search the available flight.  

After the user press on the Search Flight button, it will link to calendar select page. The page will show the price of the flight of the day departure. After the user confirm the price, user need to press to continue button to continue next step.  This page will show all the flight of the departure day. It will show the flight number, depart and arrive time, promo and the value fare. The user can know which flight is available to choose and some of the flight is not available. There are also has the fare rules provide to the user. User can refer on it. After the user chooses the flight that they wish to travel, user need to confirm and accept the fare rules, and continue to another step.  If the user is the member, user can login with their member account to saving their booking. For not user can continue their booking without login and saving their details.

They need fill up all the passenger details for example like name, date of birth, travel document, issuing country, document number and others. After fill up and confirm all the passenger details, user can continue the next step without seat selection or choose seat. If the user chooses their seat that they want there will have extra charge 15 ringgit Malaysia. If the user continue without seat selection, it will straight link to contact details page.  If the user continues with seat selection, it will link to seat selections page. Different seat have the different fee. After choose their seat, the user need to assign and continue.  This is the dtails of the seat fee.  They will remind the user again there will be extra charge for seat selections. User need to confirm and continue to next step or press nevermind button to go back to previous page. This is the contact details page. This page will show the Firefly travel protection.

User can refer and on it and confirm. Then next step of this page is special services requests. User can request to increase their check in baggage allowance up to 35 kg. User also can request that they have sport equipments or not. Next is connecting communities program. The user can donate 1 ringgit Malaysia to it if the user wants. Last step of this page is to fill in the contact page. If got any emergency information, Firefly will contact the people on this contact details. After fill in all of the information, user can continue to payment details page.  This is the payment details page. It will show the total amount due that user need to do their payment. The theory of payment methods in e-business site is The more type of payment that can be accepted, the higher possibility of a transaction will happen. In Firefly sit, firefly accept credit card, debit card or direct debit payment.  If the user has any voucher, they can add on it. But the voucher must be redeemed before any other payment methods, any of the remaining balance has to be paid by credit or debit card. With the vouchers, it will be attracted to more users.  This is the direct debit payment method. User can select their bank that they wish to direct debit payment. It accepts Maybank and CIMB bank.  Firefly also will show all the details of the booking for example like flight details, price details and the special services request summary.  User can check in the flight in the web. User just needs to keep in the confirmation number, departing and arriving location. User also can reprint the boarding pass in this page.

Comparison of functionality between Firefly and AirAsia

Comparisons of Firefly in teams of functionality are being done with the competitor which is AirAsia. AirAsia's free-seating with Xpress Boarding option, imposes on itself a negative perception, by inconveniencing passengers. Firefly's allocated seating is a plus for travelers especially groups, with no rushing and queuing for preferred seats. Strengthening the Community Airline tag is Firefly's higher baggage limit and no baggage check-in fees but again looses out on ancillary income. AirAsia goes with the No-Frills, has hidden cost, and is a turn off for international transit travelers who usually travel heavy and expect a higher baggage limit. Firefly is positioning itself using different strategy in customer convenience compared with competitor. With the pricing comparison of both airlines, both are dynamic, it is not possible to compared both pricing, both also charge the additional admin fees and airport tax.

Recommendations

Firefly needs to enhance and improve on on-time flights, and de-market this negative perception. On-time flight not only can improve Firefly perception and branding, it can saves amount of money due to low efficiency and downtime, and also cut down and decrease the airport charges. It is recommended that attaining on-time flights be made an index in employee performance, and also have a monthly stimulate tied to this performance indicator. The on-time flight information can show on Firefly's site, demonstrating Firefly's acceptance to customer satisfaction. Besides that, firefly can provide a shuttle bus service to and from Subang Airport, can help to improve its community airline image. Other than that's, Firefly site can provide the search bar for the user or the customer like the competitor AirAsia site. Search bar can help customer or user easily to find their information. Moreover, Firefly can try to expand more destination of flight to other country for example like fly to United State, England, Korea, Japan or other destination. Furthermore, the Firefly site availability is very important and make sure it is available 24 hours per day. If the website is unavailable, Firefly will lost a lot of customers. Finally, Firefly can provide live chat online system in the website. So customer can live chat with the operator anytime. The live chat online system must be available in 24 hours.

Conclusion

In this assignment, I was tried to determine and explain the business model that is used by Firefly. Business models that Firefly has are business-to-consumer (B2C), business-to-government (B2G) and low-cost carriers. Other than that, SWOT analysis is also being discussed in this assignment for example like the strength, weaknesses, opportunities and threats. Besides that, this assignment also has discussed and explains about the functionality of booking system and how is the booking system process. It will help the user and the customer booking the flight ticket. There will also some recommendations that provide to the Firefly, firefly will be more improved. 

References

• About Firefly Holiday | Firefly Holiday. 2014.About Firefly Holiday | Firefly Holiday. [ONLINE] Available at:https://www.fireflyholiday.com/about. [Accessed 01 June 2014].

• Business Model Definition | Investopedia. 2013.Business Model Definition | Investopedia. [ONLINE] Available at:https://www.investopedia.com/terms/b/businessmodel.asp. [Accessed 01 June 2014]

• Company Profile. 2014.Company Profile. [ONLINE] Available at:https://www.fireflyz.com.my/about/company-profile. [Accessed 01 June 2014].

• E-Commerce Business Models. 2014.E-Commerce Business Models. [ONLINE] Available at:https://www.tutorialspoint.com/e_commerce/e_commerce_business_models.htm. [Accessed 01 June 2014].
• For Your Information: FIREFLY - MARKETING ANALYSIS, DISCUSSION & RECOMMENDATIONS. 2014.For Your Information: FIREFLY - MARKETING ANALYSIS, DISCUSSION & RECOMMENDATIONS. [ONLINE] Available at:https://fyi-penang.blogspot.com/2009/04/firefly-marketing-analysis-discussion.html. [Accessed 01 June 2014].

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