Flybe Aviation Company Analysis Free Essay

Analysis

The company is operating in Europe regional airline in two fragments; Flybe United Kingdom comprising of UK domestic as well as UK-Europe operations. The other Flybe’s fragment is Flybe Aviation Services providing aviation services to Western-Europe clients. However, the company’s advantages entail its dominance as the top operator in United Kingdom market; robust airport presence, majority of its airline network does not have competition since out of 120 routes, it only has competitors on 27 routes and enjoys monopoly in the rest, and also has a high ancillary revenue share (“Flybe-Annual-Report-2016.pdf,” n.d.). Flybe also has some disadvantages which include; low profitability, it has higher unit cost compared to other large airlines, faces steep competition in the low-cost carrier (LCC) market and also Flybe’s operational services are sensitive when it comes to rail and road enhancements (“Flybe-Annual-Report-2016.pdf,” n.d.).

Competition

Flybe faces a tight competition from competitors. Flybe’s main competitors are BMI Baby, EasyJet, and Ryanair. Flybe tends to be performing better than its competitor even during tough economic conditions (“Flybe-Annual-Report-2016.pdf,” n.d.). This is evident from its plans to go back to competition with its partner; Loganair as it launched its jets flights from regions it did not fly before such as Aberdeen, Edinburg, and Glasgow. Further, it is also amongst the airlines that has been categorized as the low cost carrier.

Moreover, Flybe has a competitive advantage over its competitors since it implemented an effective strategy. Their strengths include devoted staffs, economies of scale, capital a large capital share within the UK market as it possess a 48 percent market share, as well as sufficient resources for expansion of the business. Flybe is leading its competitors as it is present in 30 out of 60 airports within the UK as compared to its competitors as easyjet which has 16 equally with Rynair and British Airways which has only ten. Among the strategies that Flybe uses for competition reduction include partnerships, exploitation of markets where it is highly preferred, and reduction of travelling cost. Among Flybe’s partenrs include; Loganair, British Airways, Aer Lingus, Amadeus, Emirates, Alitalia, Etihad among the rest. Its major competitors are Lufthansa, LAG, easyjet, RyanAir, and Wizz Air. As Flybe currently possesses a competitive position due to differentiation, it has ignited other competitors to consider using this strategy since it can be easily adapted to(“Flybe-competition-case_1.pdf,” n.d.). In short, Flybe has been using an effective strategy that made it stand out from its competitors. Therefore, in terms of competition, product differentiation is utilized to insulate Flybe against the competitive environment whereby Easyjet and Ryanair have big stakes.

In this part, you talk mostly about the strategies they use to reduce the competitiveness. I want to know who they are competing with, both regional airlines that operate in Europe and UK domestic airlines. When you give statements like “Flybe is leading its competitors” you can’t just say it out of no where. You have to give evidence to support and tell us in what way they are leading the others. I am not sure if we will have any space for graphs and diagrams or not, but if you can find any graphs or diagrams that are relate to the topic it would make the report easier to understand.

Strategies

There is a high demand for short (about 90 minutes) flights in regional airline industry (“Final Submission.pdf,” n.d.). As a result, Flybe aims to transform itself into a world-class regional airline. To reach that goal, Flybe considers a business strategy that suits the market wants. Flybe strategy focuses on delivering incomparable regional connections throughout Europe, acquiring greater flight frequency with fewer passengers and shorter routes. Whereby conventional airlines are inept of serving efficiently or profitably.

Differentiation strategy

Flybe has switched its strategy to the ‘Differentiation strategy’. Flybe’s main competitors still use the ‘No-frills strategy’ Yes. The no-frill strategy allows them to eliminate non-essential features to keep the cost of production low. On the other hand, Flybe instead, has begun to use product differentiation.It is evident that Flybe’s product differentiation is incorporated in recurrent flier programmes, corporate users and business express travel Flybe utilizes its product differentiation model fro recurrent flying ventures, business users, as well as long distance direct flights(“Flybe-Annual-Report-2016.pdf,” n.d.). Flybe was the first company within the UK to charge for check-in baggage clients’ luggage are presented to Flybe and this makes them responsible and liable. Most customers like to be free from any luggage during flights but at the same time want their items kept safe. The year of commencement of this service is not clearly mentioned

The advantages attained to this strategy entail customer value creation value addition to services offered such as offering complimentaries during flights, obtaining a market share as well as attracting customer loyalty to the products being offered.

Flybe has revealed that this Differentiation strategy works effectively for them. It has increased its profits and growth in customers. Due to this, competitors have imitated Flybe’s strategy.

This company has utilized its strengths in fleet efficacy and competitive routes to protect itself from the competitiveness and enable them to take advantages from the expanding LCC market (“Flybe-Annual-Report-2016.pdf,” n.d.).

Flybe has also made good use of product differentiation as well as customer loyalty in the exploitation in business it would mean taking advantage of a situation of a larger share of the expanding market. Through the purchase of eco-friendly aircraft, this company has been able to overcome the concerns of global warming threats that threatens the company and the industry as a whole. In essence, product differentiation had been utilized in insulating Flybe out of the competitive environment whereby Easyjet and Ryanair have a large share.

Improvement

After a number of weaknesses such as low profitability and a higher cost than other larger airlines in 2015 that contributed to some underperformance, Flybe has reformed the business – by finishing an effective capital as it started leveling on its market share by concentrating on markets where they prevailed. This is not part of their original plan raise then reinitiating the Flybe brand (“Flybe-competition-case_1.pdf,” n.d.). They have resolved some crucial issues being of; releasing brand new aircrafts which is part of their original plan undertake plans against their competitors, ousting unprofitable and time consuming joint projects yes, partnerships limited its operations. Flybe also resolved the final core legacy issue through redeployment of their E195 aircraft this is a plan to cut on fuel cost. Its revenue and profits increased regardless of the critical market fluctuations.
The clearance of Flybe’s main legacy issues enabled them to concentrate on expanding and becoming a sustainable regional airline. Flybe has made some improvements such as extra frequencies on the routes that exist, new bases such as operations in Aberdeen and and Glasgow also new commercial partnerships such as with Emirates, Air France, and Air India (“Final Submission.pdf,” n.d.). The advantage is vividly depicted in the company’s results as it attained profitability. Flybe now has a late-booking business which enables clients with emergency needs to be able to access their services.

Nonetheless, currently Flybe is an aggressive for emphasis on what exactly Flybe is aiming at business with a responsive management. Substantially minimizing the capacity to grow and be at par with other airlines and progressing the company’s cost minimization initiatives. Embrace yields and admit lower load factors.

Though the financial effect as of year 2016 may have been crucial, decisive management action stopped the net changes on the company’s annual profit forecasts. The company’s improvement attributed to low spot oil costs which resulted in the reduction of their operational costs. All airlines including their major competitors (other transport alternatives) have from the low oil prices (“Flybe-competition-case_1.pdf,” n.d.). Consequentially, a lot of fuel cost saving was in benefit (favor/ serving the consumer) consumer through low fare prices.

The company has strived hard to engage and impart their values to its employees when undergoing the changes they include cost restructuring, rebalancing of fleet, and making load factor gains by focusing on high frequency routes this was undertaken between 2013 and 2015. Acknowledging their hard work and devotion has further motivated their employees. the improvement of employees engagement and satisfaction to the company was demonstrated through the survey they conducted.

Additionally, their reputation has improved even being able to sign a landmark codeshare agreement between “Virgin Atlantic”. Connecting fourteen Flybe’s routes to twenty Virgin Atlantic’s routes all the way from the United States to the United Kingdom (“Flybe-Annual-Report-2016.pdf,” n.d.) Yes, this way, the veracity of the information herein can be noted. Moreover, it has managed to sign another new franchising agreement between “Blue Islands”- operating flights to Jersey from Guernsey airports. They are expecting to increase this route to 5 aircrafts in the near future.

When you research about the company, try put yourself into an investor’s position. If you were interested in investing in Flybe’s share, is this all you want to know about them? Does it give you enough information to decide whether or not you should invest in it? Bear in mind that you should include relevant information as much as you possibly can, don’t just repeat the same things over and over again.