A brief description of the flights operated in each route including the aircraft types/capacity, flight duration, departure times etc.
This paper deals with the role of a route analyst working for airlines in which you are required to evaluate the profitability of some leisure and business routes of your choice. For this purpose, you have to gather airline ticket price data for each of your routes on a daily basis. Afterwards, you have to analyse the 2019 easyJet airline financial report to estimate the operating cost. Moreover, following aspects would be covered in the report in detail:
- Short description of the operations of the flights of each route that contains the the aircraft types/capacity, flight duration, departure times etc.
- Interpret the revenue management strategies used in different airlines.
- Compare and contrast the price fluctuations between airlines along with proposing possible solutions.
- Choose any one routes from the list for in-depth analysis and study such as total revenue, total operational cost, the total profit/loss, profitability of the route, etc.
A key element of a profitable global aviation industry is the ability of airlines to generate a sufficient amount of revenue from passengers on each route and to keep the cost of operations as low as possible. Airlines rely on a team of revenue analysts to ensure that every seat sold is done so at the maximum price possible. When revenue management get it wrong, the airline will either not fill enough seats due to high prices or fill too many seats at low prices. Both scenarios will result in lost revenue. Cost analysts try to minimise cost by keeping operational costs low but ensuring the passenger experience and safety are maintained. Higher revenue and lower costs equate to a profitable route. To maximise revenue, airlines incorporate price discrimination whereby similar seats are sold at different prices depending of passenger demand and time of booking. The general perception amongst passengers is that the earlier you buy the ticket the cheaper it is. However, this is not always the case and dependant on the revenue strategy implemented by the airline.
As part of this assignment, you are assuming the role of a route analyst working for easyJet airlines. You have been asked by the route manager to analyse the profitability of some leisure and business routes of your choice. To analyse the revenue management strategy of easyJet and the competitor airlines, you will need to collect airline ticket price data for each of your routes on a daily basis. You will then analyse the 2019 easyJet airline financial report to estimate the operating cost. It is important that you correctly chose the route and flights for the data you plan to collect. Poor planning will result in poor data making it difficult for you to get a high mark.
The following is the specification for the data you need to collect:
Select three European short-haul routes operating in the winter season.
At least one or your routes must be a leisure route.
At least one of your routes must be a business route.
At least one of the flights on each route must be operated by easyJet.
Select one-way, direct flights only for 1 adult passenger.
Select a departure date in late November/early December.
Record the lowest available ticket price for a minimum of two airlines per route. You
should aim for at least 8 flights in total across the three routes.
Aim to record prices daily for a minimum of 40 days before the departure date.
Identify the aircraft types operating the route to estimate the seat capacity.
To be able to compare the competition between airlines, you should:
Select flights departing and arriving at the same airport.
Select similar departure times if possible.
Record ticket prices at a similar time of day.
Only use the airlines own websites to obtain prices. While price comparison sites such
as Skyscanner, Expedia, Ebookers etc. can be used to plan the data you intend to collect, do not use these sites for collecting the daily ticket prices.
Module Study Guide – Air Route Planning 6
Delete internet cookies before requesting prices.
Be careful not to choose two airlines operating a codeshare.
Typical leisure destinations are:
Spanish coastal resorts and islands; Greek islands; Cyprus; Turkish coastal resorts; Southern France; Malta; Italy
Typical business routes are major European financial cities such as:
London; Brussels; Paris; Madrid; Frankfurt; Berlin; Munich; Copenhagen; Lisbon; Stockholm; Oslo; Milan; Geneva; Zurich; Amsterdam; Athens; Rome
A data collection template spreadsheet is available in the module on Blackboard. You are strongly advised to check the flights you have selected with the module tutor, before embarking on the daily collection of prices.
Once you have collected all the data, you need to write up a 2000-word report of your findings. Your report should:
(i) A brief description of the flights operated in each route including the aircraft types/capacity, flight duration, departure times etc.
(ii) Analyse the revenue management strategies used by the various airlines on the route by presenting the ticket price data using clear and appropriate graphical methods. Price fluctuations with time should be clear and you should explain the price trends. Compare the price fluctuations between airlines and suggest possible reasons for the differences. Can you identify the optimum time to buy a ticket? Is there a day of the week when prices are the cheapest?
(iii) Select one of your three routes for further analysis. For the easyJet flight in this route, estimate the total revenue from the flight and the total operational cost. Estimate the total profit/loss for the route. Your estimate of operational cost should be as accurate as possible and the method clearly explained. Explain how easyJet can make the route more profitable.
You must only use data that you have collected.
The submitted assignment should be structured as a technical report and must be a maximum of 2000 words. You should include a word count at the end of your report. You may use diagrams wherever appropriate to clarify your explanations. You should keep a spreadsheet of the data you have collected but you do not need to include it in the report.
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