Title: Assignment 2 – Individual Research and Formal Analytic Report

Assessment brief: Individual analytical report related to an international airline’s strategic route network, market(s), product design, passenger pricing, flight scheduling, and fleet analysis.

Case Scenario

Australian International Airlines (AIA), is a low cost carrier (LCC), based in Melbourne, Australia, currently operates scheduled passenger services with 10 leased Airbus A330-200 aircraft, in an all-economy cabin configuration (260 seats), on the following international routes to and from Sydney:

Melbourne – Auckland (3 services per day)
Melbourne – Christchurch (2 services per day)
Melbourne - Denpasar (Bali) (Daily service)
Melbourne - Nadi (Fiji) (Daily service)
Melbourne - Noumea (New Caledonia) (Daily service) Melbourne – Wellington (2 services per day)

The Chief Executive Officer (CEO) and the Board of Australian International Airlines wish to change their current business model so as to become a full service network carrier. In order to achieve this new strategic focus and strategic positioning, they wish to expand their current route network and product offering so as to optimise new market opportunities and the company’s profitability. A key part of this new strategy is the acquisition of a new fleet of 20 Boeing B787-8 or Boeing B787-9 aircraft that to be used to support the proposed network expansion and enhanced product offering, and thus, their transition to a true full service network carrier (FSNC). The existing fleet of 10 leased Airbus A330-200 aircraft will need to be progressively replaced by either the Boeing B787-8 or Boeing B787-9 aircraft.

You are the Australian International Airlines General Manager Commercial Operations, Network and Strategy. Your department has been requested to prepare a detailed report for the CEO recommending the Boeing 787-8 or the Boeing 787-9 aircraft as well as the new product design and route network. Thus, the report will recommend the product design, flight schedule and route network for the additional 20 Boeing 787-8 or Boeing 787-9 aircraft. You should consider in this analysis:-

  • - increased frequency on the existing AIA routes
  • - new routes

Objectives:

The objectives of this assignment are that you will be able to:

  • Examine the current AIA Airbus A330-200 network
  • Use all available information to assess the opportunities for new routes for AIA using a fleet of 20 new Boeing B787-8 or Boeing B787-9 aircraft (assume a maximum individual non- stop 9,000km payload range capability). Assume all bilateral air services agreements (ASAs) will be successfully obtained by the airline
  • Review competitor products and route networks, including routes from which have competitors previously withdrawn (for example, Qantas previously operated services from Australia to Athens, Paris and Frankfurt), and also assess opportunities for AIA to fly to new leisure and key business travel markets
  • Investigate and recommend a suggested product design (pre- flight and in-flight, including seating configuration (by cabin class), in-flight entertainment (IFE) system and in-flight menu’s, by travel class), a flight schedule, air fare tariff (including booking restrictions) and passenger product distribution system) for the potential routes
  • Recommend the route network for the 20 additional Boeing B787-8 or Boeing B787-9 aircraft
  • Prepare a report outlining your analysis and recommendations

Project Scope:

This project requires research and analysis related to airline product design and pricing, fleet analysis, commercial operations, and airline strategic management. This project contains two (2) parts. The first part requires investigation of the Boeing B787-8 and Boeing B787-9 aircraft payload/range characteristics, and the route opportunities that such aircraft would provide to Australian International Airways (AIA); the second part of the project requires a carefullyreasoned and presented proposal outlining your recommendations on the new aircraft fleet, new route structure, as well as the product design to the AIA CEO.

To properly address both parts of this project the report will need to reflect your understanding of the relevant key concepts and theories raised within this course.

Part 1) - Investigation of route opportunities for either the Boeing B787-8 or Boeing B787-9 aircraft

You should review:-

  • - The payload range capability of the Boeing B787-8 or Boeing B787-9 aircraft and identify and propose possible new routes for AIA to consider operating to
  • - the current AIA A330-200 network
  • - current competitor’s route networks
  • - any routes from which Qantas or Jetstar have previously withdrawn to assess if AIA could operate them profitably with either the Boeing B787-8 or Boeing B787-9 aircraft
  • - opportunities to grow the existing network by flying new services between existing stations
  • - analyse competitors on possible new routes, and anticipated demand for both inbound and outbound markets
  • - recommend a suggested product design (pre-flight and in-flight, such as, seating configuration – cabin class, seat pitch, number of seats, in-flight entertainment system (IFE) and menu’s, by travel class), flight schedule, air fare tariff (air fares and booking restrictions where applicable)
  1. Part 2) - Proposal for an AIA Boeing B787-8 or Boeing B787-9 route network and product design

Write a proposal for the future network for the 20 new aircraft (assume the existing A330 network will be retained in the short-term [2 to 3 years] but will then be replaced).

School of Engineering - Aviation

You should:

Identify any existing network enhancements, including additional frequencies or flying new services between existing stations

  • Identify new markets for AIA, including flight frequency
  • Develop and present a flight schedule, in which either the Boeing B787- 8 or Boeing B787-9 aircraft will return to an Australian base after operating 2 to 4 international long haul sectors
  • Present the proposed product design (pre-flight [on-ground services and facilities, such as, business lounges and passenger check-in kiosks] and in-flight: seating configuration by cabin class [number of seats by class, seat pitch by class], in-flight entertainment system [IFE] and in-flight menu’s, by travel class and flight sector, a flight schedule, air fare tariff for the potential routes
  • Your proposal should use relevant key concepts discussed in this course, but naturally you should demonstrate reading of information other than that which is provided as course material. Information that you have not created must of course be suitably referenced to acknowledge the original author(s) and identify the source.
  • Process:

For the Boeing B787-8 or Boeing B787-9 route network and product design you will prepare a report outlining your analysis and recommendations addressing the following items:

  • Detailed analysis of the technical and key operational characteristics of the Boeing 787-8 or Boeing B 787-9 aircraft
  • review of the AIA current and potential route network
  • recommend an expanded route network which incorporates existing

stations (airports currently served)

  • Recommend frequency expansion, where appropriate, on existing routes
  • benchmark competitor performance on any new proposed routes
  • present the proposed product design (pre-flight and in-flight) , including cabin configuration [number of seats by cabin class, seat pitch by cabin class], IFE, in-flight menu’s and the ground-based product
  • benchmark the proposed AIA product design against the current competitor service/product offerings
  • present a flight schedule
  • present an air fare tariff (by travel class, sectors, which should also include the recommended air fare restrictions applicable for specific air fares
  • Format
  • Printed on A4 paper, 1.5 line-spaced, in a 12-point font such as Times New Roman, Courier or Palatino. Wherever possible, you should use appropriate graphs, diagrams and figures to augment the text – these should be numbered consecutively and must be referred to in the text of your paper. The full detail of the source(s) of the figure/graphs/diagrams also needs to be included in the assignment reference list in accordance with the Harvard Reference Style Manual requirements.