Know-How Exchange : Student Questions

Dear tharangaudara,

Phil's points are sound. Listen to his counsel.

The other things to consider are that smaller airlines, when compared to their bigger competitors, may have lower overheads before they turn a profit, or before they break even.

Often, smaller companies will take breaking even AGAINST making a profit because their name is still getting out into the marketplace without it costing them significant amounts of revenue. This sounds crazy because the whole point of being in business is to make money.

What way too many outfits ignore is that often, to remain in business, breaking even is or can be GOOD ENOUGH!

Smaller companies may not owe hundreds of millions to airliner companies for new planes, they may not be locked in to fuel deals with long lead times, they may pay their staff less, and they may offer more in terms of overall benefits.

All of which can mean that they pass savings on to passengers, and that the passengers then, based on their great experience, become brand evangelists on the airline's behalf—thereby making all those marketing dollars work so much harder.

I hope this helps.

Gary Bloomer
Wilmington, DE, USA
Follow me on Twitter @GaryBloomer

This sounds very much like a homework questions but.....


Airlines could do a lot to reduce costs simply be eliminating their real estate (offices etc) and employees. It's not that you don't need it, but how much do you really need.

Outsource
1) sales and marketing
2) Maintenance
3) Accounting
4) Customer service
5) Check in staff

BUT all those people should get flight benefits. That's the one benefit that people want

Michael