What Are the Key Success Factors in the European Airline Industry?
6. What are the key success factors in the European airline industry?
---When addressing this question we find it worthwhile to remind students that a KSF is what any firm in the industry must do to be successful. Based on this definition, the following KSF’s apply to the European airline industry: (1) A reputation for safety – This is a fundamental KSF for any segment of the airline industry. If a firm is not viewed as safe by potential passengers, they will not use the carrier. (2) Offering fares that are competitive and consistent with the quality of service offered. Many students may want to automatically list “Low Fares” as a KSF. This is true, to an extent. Many fliers do not just want low fares; they also prefer a certain level of service.
(3) Containment of controllable costs –as the uncontrollable costs increase, successful firms in this industry will work diligently to maintain or reduce controllable costs. This will enable them to increase profitability and/or keep costs attractive to customers. Two of the main ways to control costs are through high labor productivity and low turnover, and through the utilization of superior information systems.
(4) A company with a high labor turnover is not going to be as productive or profitable. The ability to find and retain quality employees can allow a company to reduce their costs and increase profitability. Information systems allow the airlines to be more efficient with the use of their resources. In order to be successful, a solid information system is a necessity. (5) Access to terminals at profitable airports – Airlines need to be able to fly to the destinations that customers want. The companies that are going to succeed in this industry are the ones that have the best “seats” in the house. Those airlines that have access to terminals in the airports that are visited the most will be the most successful. (6) Quick (and cheap) check-in and baggage handling – When customers need to
---When addressing this question we find it worthwhile to remind students that a KSF is what any firm in the industry must do to be successful. Based on this definition, the following KSF’s apply to the European airline industry: (1) A reputation for safety – This is a fundamental KSF for any segment of the airline industry. If a firm is not viewed as safe by potential passengers, they will not use the carrier. (2) Offering fares that are competitive and consistent with the quality of service offered. Many students may want to automatically list “Low Fares” as a KSF. This is true, to an extent. Many fliers do not just want low fares; they also prefer a certain level of service.
(3) Containment of controllable costs –as the uncontrollable costs increase, successful firms in this industry will work diligently to maintain or reduce controllable costs. This will enable them to increase profitability and/or keep costs attractive to customers. Two of the main ways to control costs are through high labor productivity and low turnover, and through the utilization of superior information systems.
(4) A company with a high labor turnover is not going to be as productive or profitable. The ability to find and retain quality employees can allow a company to reduce their costs and increase profitability. Information systems allow the airlines to be more efficient with the use of their resources. In order to be successful, a solid information system is a necessity. (5) Access to terminals at profitable airports – Airlines need to be able to fly to the destinations that customers want. The companies that are going to succeed in this industry are the ones that have the best “seats” in the house. Those airlines that have access to terminals in the airports that are visited the most will be the most successful. (6) Quick (and cheap) check-in and baggage handling – When customers need to