Question:
Discuss about the Case Study of Spirit Airlies Pvt. Ltd.
The company under study is Free Spirit Airlines. It is a Melbourne based company, established in 2012 and came into operation on 2015. The founder and managing director of the company is Roman Badov. The company is 100% Australian owned, which serve its mission to provide a better aviation services to Australian communities (Reasons, 2017). The report will be providing brief background information of Free Spirit Airlines Pvt. Ltd., Where the reader will found information on the industry, location, size of the business, marketing conditions, customer segments, demand conditions, competitors and also the founder’s background. A brief description of the products and the services provided by the company will also be given. SWOT analysis is doe in the report to understand the strategy and prospects of the company. A summary and their business model are also discussed at the end of the report.
The founder of the company Roman Radov established the company Free Spirit Airlines Pvt. Ltd. in the year 2012 with an aim to make travel a pleasant and memorable experience. The headquarter is situated at Melbourne Essendon Airport. They use a Beechcraft 1900, a seater turbo-prop aircraft (Reasons, 2017). In order to keep the complete profit within Australia, they keep the company 100% Australian owned which also serves the purpose to provide better aviation services to Australian communities (Reasons, 2017). They flew for the first time in 2015 which was from Essendon Airport to Burnie (essendonairport, 2017). They flew in this route for 2 years until 2017 when they decided to quit the route due to exorbitant charges imposed by Burnie Airport Corporation. Currently they are operating with Merimbula and run three flights weekly.
Free Spirit Airlines faced many hurdle in operating in this short period of time. They have decided to quit their service rout from their’ headquarter in Melbourne to Burnie due to the exorbitant charges (The Advocate, 2017). They faces some maintenance issue for which, the flights from Melbourne to Merimbula was suspended for the whole month of November in 2016. Apart from their internal issue, they also face external competition for other airlines as Free Spirit only operate in limited destination with very few passengers. They are planning to expand in its Victoria and New South Wales routes.
Roman Badov, the founder of the company started the company with the interest of offering an economical travel alternative coupled with focus on passenger comfort and individual needs of their customers. They are currently Melbourne to Merimbula travel specialists. Their offers are always more convenient than other similar organizations in the industry. Moreover, they focus on the idea of keeping the profit in Australia without involving any off-shore organizations that will exploit the profit. They operate in low scale and give prior importance in providing a pleasant and memorable experience to every single passenger. They are currently aiming in expanding their business to other parts of the country.
The company has implemented different range of services for their customer to experience a memorable travelling experience. They offer their customers a wide range of selection to satisfy every single passenger who flies with them. Passengers can select the service of their choice during the flight to get a hustle free enjoyable ride. The attendants are well trained to satisfy the diverse need of their passengers, as they promise. Free Spirit Airlines believes and respects individuality which resulted in planning their services offered. Further, there are clear specifications provided in their terms and conditions which makes it easier for the customers to deal with any quarry they have (T&C, 2017).
The products and services offered by the company is the main attraction of the company. They assure customer based service to the individual passenger boards on the flight. A low cost parking facility is provided in the airport. They attract their customers with free snacks and drinks which is hard to come by in any airlines these days. A relaxing and speedy journey through Essendon Airport is provided to the customer with less congestion and faster transit. The main attraction of the company is that the customers will get all these facility for a cheaper price than other similar airlines.
Free Spirit Airline, which is based in Melbourne, follows a low cost business model. The company is 100% Australian owned which makes it convenient for the travelers to provide a desired service to the local passengers (Reasons, 2017). The company is for the people who like to travel hustle free and in uncongested plane at a low cost. The company also provides low cost parking at the airport for their passengers. They maintain a transparent pricing, which is rare in the industry these days.
The company has a poor management strategy and bad track record. In May 20015, they had 56 scheduled flights which was about to carry 126 passengers, out of which, 28 of the flights were cancelled (abc news, 2017). Though the founder is claiming that the company is implementing disrupt management to minimize impact and inconvenience to the customers, reports have been received from the customers that they cancelled their flight in short notice (Hubbard, Rice & Galvin, 2014).
The company under study is a domestic airline of Australia completely owned by the Australians to keep the profit within Australia. A SWOT analysis is important to understand the market and the prospect of the company.
As a startup company in the Australian airline industry it is important to focus on the positive and unique point of the company to utilize them as strength in the market. Free Spirit provides a high class customer service to their every single passenger at a reasonable price. The company has ties with West Wing Aviation which provides them the aircrafts. Currently they have Beechcraft 1900 which can carry 19 passengers (Reasons, 2017). They offer their customers a free refreshments which hard to get by these days. They also offer convenient services in the Essendon Airport. Their tagline people before profit which they actually serve make them different from other such airlines in the market, which works as a positive point for the company (Hill, Jones and Schilling 2014).
As they operate with Beechcraft 1900 (Reasons, 2017), they can carry only few passengers at a time. Though it is their primary mission giving their customers a convenient traveling experience, it delays the process of making profit out of it. The faced some challenges in their starting years in their services which they have to resolve as fast as possible (Consoli, 2016).
As they are fully Australian owned company, more people will get attracted to their service. It is also a reason that they can give such services in such a low cost (Sutrisno, 2016). Their new target of expanding in Victoria and New South Wales can be seen as an opportunity to grow in the market.
Increased fuel cost possesses threat to all the airline companies. Eventually it will raise the fare of the ticket. The risk factor for Free Spirit is greater as they provide high services in low cost and fly with only 19 passengers in a trip. Increasing competition is another threat for the airline. As they operate only between Melbourne and Merimbula, it is hard for them to cope up with the challenge (Cooper, 2014).
PEST analysis of Free Spirit Airlines is done in this report in order to understand the current situation and future prospects of the company. It is basically an analysis of the company in four aspect which are political, economical, social and technological (Hastings and Domegan 2013).
A warm relation with Melbourne government and the Essendon Airport is seen now and then. Moreover, the company has full support from the states of operation which is important in this industry (Song, Sun & Jin, 2017).
The liberal aviation policy introduced by the Australian government has a negative impact on the company. Declined oil price over the last two years have increased the profit margin of the company. But recent inclination in price is a matter of concern (Szolnoki, Thach and Kolb 2016).
Being an Australian airline own cent percent by the Australians, brings the company a wide public support. It resulted in their rapidly growing customer base. The company’s support for Bully Zero Australia Foundation gave them a favourable position in the market.
They have tie-ups with West wing for their air carriages. The company uses 19 seater Beechcraft 1900 for all their flights (Reasons, 2017). They have a large investment in technologies as it is critical for the satisfaction of their customers and to provide the best experience (Ho 2014).
The company came in the news many times for various reasons from the day of operation. Most of the time, it was for the poor service they provide. Many of their flights were cancelled due to various reason and the customers were informed in short period due to their poor service. They need to implement a strong management strategy to overcome these problems in near future. Other service like in flight management and services, airport services are considerably better and the customer reviews regarding these cases were fair.
Conclusion
The report presents a detailed knowledge of company’s background. The challenges that the company faced in their early years are also mention in the report. The business interest as stated by the founder Roman Badov is highlighted afterwards which shows clears the future plans of the company. Their business model and cultural flexibility is cultured in the report which needs to be improved, as the company lack management in the implementation part. They need a stronger and strategic management plan to overcome. The SWOT and PEST analysis is also done in the report. It clearly represents the market situation and the company’s position. The reports clearly show the need of the company with a proper strategic management.
References
abc news. (2017). abc.net.au. Retrieved 2 August 2017, from https://www.abc.net.au/news/2015-06-03/rex-reax/6516556
Cooper, T. (2014). Digital technologies and the future of the Australian fashion industry.
Consoli, D. (2016). The Global Market Of Small Businesses By E-Commerce Platforms. Challenges Of The Knowledge Society, 966.
essendonairport. (2017). essendonairport.com.au. Retrieved 2 August 2017, from https://www.essendonairport.com.au/news/free-spirit-airlines-launches-new-service-to-burniewynyard
Hastings, G. and Domegan, C., 2013. Social marketing: From tunes to symphonies. Routledge.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.
Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European academic research, 2(5), pp.6478-6492.
Hubbard, G., Rice, J., & Galvin, P. (2014). Strategic management. Pearson Australia.
Reasons. (2017). freespiritairlines.com.au. Retrieved 2 August 2017, from https://www.freespiritairlines.com.au/
Song, J., Sun, Y., & Jin, L. (2017). PESTEL analysis of the development of the waste-to-energy incineration industry in China. Renewable and Sustainable Energy Reviews, 80, 276-289.
Sutrisno, A., Kwon, H. M., Gunawan, I., Eldridge, S., & Lee, T. R. (2016). Integrating SWOT analysis into the FMEA methodology to improve corrective action decision making. International Journal of Productivity and Quality Management, 17(1), 104-126.
Szolnoki, G., Thach, L. and Kolb, D., 2016. Current Status of Global Wine Ecommerce and Social Media. In Successful Social Media and Ecommerce Strategies in the Wine Industry (pp. 1-12). Palgrave Macmillan US.
The Advocate. (2017). theadvocate.com.au. Retrieved 2 August 2017, from https://www.theadvocate.com.au/story/4642627/free-spirit-pulls-out-of-nw/
T&C. (2017). freespiritairlines.com.au. Retrieved 2 August 2017, from https://www.freespiritairlines.com.au/termsandconditions
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