Aer Arann Express currently employs 260 staff. This follows the creation of 35 new jobs as a result of setting up its own passenger handling division at Dublin Airport. Aer Arann possess a superb workforce. According to Pi?? draig O’Ceidigh, “they would spill blood for the team. Aer Arann people have a sense of integrity and trust and believe in our shared objectives”. On one occasion an engine blow-out resulted in a spending requirement of i?? 20,000. Two members of staff were aware that the money was not available and subsequently approached their boss offering to provide the finance.
This is testament to the remarkable commitment and loyalty at Aer Arann. Their recruitment process strives to select people who are happy to push the limits of their comfort and stretch themselves to contribute to the success of the company. Financial Resources In recent times, Aer Arann has experienced a transformation of its financial position. Eight years ago the airline recorded an annual turnover of i?? 250,000 by flying 10,000 people to the Aran Islands. Aer Arann is now one of the fastest growing regional airlines in Europe with a turnover in excess of i?? 60 million and projected passenger numbers of 650,000 for 2003.
Like Ryanair, Aer Arann looks to the Southwest Airlines in the US as their low-cost inspiration. They have a ratio of 87 staff per plane while Aer Arann’s ratio is only 20. Clearly smaller planes are involved but it demonstrates their desire to keep it simple. Although the company receives financial support from Bord Failte because its activities aid tourism, the ability to raise finance is limited as the airline is 100% owned by Pi?? draig O’Ceidigh. The company has been approached by various investors keen to buy into the business but the owner believes the carrier can grow without external investment in the short-term.
Revenue is projected to increase through achieving a target of carrying 750,000 passengers a year by the middle of 2004. Intellectual Resources Athough confessing that when he purchased Aer Arann he knew ‘nothing about the airline business’, O’Ceidigh has assembled a reliable team around him who he can trust and secure advise and assistance. He has been an accountant, teacher, solicitor and marketer in previous roles and has drawn from all four of these disciplines in order to run Aer Arann.
To encourage an entrepreneurial culture within the organisation, cross functional groups have been established so that technicians can input to marketing and vice versa. This has created a very committed team and a successful airline. These groups have been responsible for key initiatives, such as the introduction of an in-flight magazine, “Express it” to satisfy the needs of the target markets. Physical Resources Aer Arann have recently invested i?? 3 million in establishing its own passenger handling division at Dublin Airport, resulting in the creation of 35 new jobs.
The new passenger handling division began operations from 1 June 2003 and manages the airlines check-in, boarding, dispatch and baggage handling functions. The company has also introduced a new reservations, online booking and check-in system representing an investment of i?? 8 million over five years. As well as ensuring a speedier booking and check in process for passengers, the Open Skies system will enable the airline to offer enhanced services such as ticketless travel, each way pricing and online booking for corporate and travel agency customers. Reputational Resources
Aer Arann adopted a different corporate image in 2000, becoming Aer Arann Express. While still emphasising its strong Irish roots, the new branding aimed to reflect the dynamic and vibrant aims of the expanding company. This has proved to be a successful move for the company and in the interim period the brand name has rapidly become a household name. The company has built a reputation for providing quality competitive air travel for business and leisure passengers in the various regions, through its expanding portfolio of air routes. Quality of service and operation is highly important to Aer Arann.
The company were the first European airline to receive the ISO 9000 award. The award promotes the recognition of their quality, safety and reliability – important attributes to any passenger. Conclusions & Recommendations It is widely acknowledged that Aer Arann have remarkably transformed their operations from its humble origins to having now flown in excess of one million passengers. 2001 was the toughest year in aviation history, but it was a period when Aer Arann met the immense challenges posed by its external environment and the company grew dramatically.
At the present time, the main deterrent to domestic commuters choosing air travel is the service cost compared to the cheaper method of road and rail. Aer Arann’s target markets are business commuters and tourist/leisure commuters. Although the business passenger, constrained to time, is willing to use the more expensive mode of transport for convenience, tourists and other commuters will continue to favour the cheaper options. Currently a return flight from Dublin to Cork with Aer Arann ranges in price from i?? 130 to i?? 190 depending on the time of travel.
A return ticket with Irish Rail for the same journey costs i?? 51. 50, which represents a significant difference. There are three million passengers a year moving between Dublin and Belfast – two million by bus and one million by train and Aer Arann are attempting to secure 450,000 of these passengers. It is recommended that to allow Aer Arann to be more competitive when targeting existing rail users, and promote the popularity of flying when travelling within Ireland, the company will need to consider lowering its fares to a more competitive figure.
This could involve a cost minimisation programme similar to that successfully undertaken by Aer Lingus recently. The significant difference between the fares is clear to commuters and although it is not feasible for Aer Arann to match rail fares, they need to substantially minimise the difference in price. By reducing their fares, rail commuters may now favour paying a slightly increased fare to travel by air and benefit from time savings. With an effective marketing campaign promoting reduced fares, Aer Arann can achieve a measurable increase in domestic commuters availing of their service.
As Aer Arann is competing with major players, such as Aer Lingus and Ryanair, there is a requirement for increased emphasis on the marketing function within the organisation. Up to now most of its advertising spend has gone to local newspapers and radio stations in Ireland and Britain. Heavy investment in an advertising campaign could serve to promote brand recognition, making use of TV, radio and newspaper mediums. When aimed at the business market, the main focus should be concentrated on informing customers of the benefits to be derived from air travel.
Taking a domestic flight to attend a business meeting is cost-effective because it can reduce commuting time by up to 75%. In particular when compared to travel expenses incurred through a company car, taking Aer Arann’s ‘Skyroad’ is a very cost efficient mode of transport for companies. Similarly, for the leisure market, Aer Arann provide an array of novel services, including flying GAA supporters from the regions to Croke Park for All-Ireland championship games, Santa trips to Lapland and ‘Christmas Cracker’ shopping excursions.
Knowledge of these activities is inadequately communicated to the target markets. The company could gain huge benefits through an advertising campaign aimed at informing customers of the various services on offer. Along with TV, radio and newspaper adverts, GAA match programmes and books could also provide a medium. There are now increased number of games played annually in Croke Park and Aer Arann should fully exploit the current opportunity of flying both players and supporters to matches, by making direct contact with this section of the market.
The provision of an in-flight magazine and the investment in electronic booking and check-in facilities suggest that the company is striving to add value to a customers experience with the airline. However, negative publicity recently surrounded the company whereby a complaint was received regarding an alleged incident, involving inappropriate remarks made by a crew member to a senior government official. In order to maintain a high level of service, it would seem necessary to develop more customer-oriented practices, to ensure incidents like these do not emerge to threaten Aer Arann’s reputable status in the marketplace.
For example, the company could make use of interviews or questionnaires with passengers to simplify complaint procedures and to encourage passenger feedback. This feedback is valuable information for the company as it allows them to assess current operations and make necessary improvements to customer service. Word-of-mouth and testimonial recommendations can prove a very effective form of advertising for the company. The quality of the service offered is a source of competitive advantage and it is critical to maintain consumer confidence in an industry that has suffered somewhat in the aftermath of terrorist attacks.