PEGASUS AIRLINES Case Study

Introduction

The airline industry has recently experienced an unprecedented expansion of so called low-cost carriers.

Pegasus Airlines: A Brief History

Pegasus Airlines was established in 1990 as a joint venture between Aer Lingus, Silkar Yatrm and Net Holding in Istanbul.

Pegasus Airlines: A Brief History

Throughout its successful 19-year history, Pegasus has become one Turkeys leading airlines and currently has scheduled and charter flights to more than 100 different destinations in 17 countries. Today they operate a fleet of 24 aircraft.

Pegasus Airlines Today

The privately-owned Turkish LCC already operates an extensive European and domestic Turkish network with services to Eastern Europe and the Middle East growing rapidly.

Core Problem

The core problem of Pegasus Airlines lies in their capability of attracting new customers and retaining old ones.

Subsidiary Problem
Unsatisfactory customer service, packed and dirty aircraft highlighted by the worst on-time performance

S.M.A.R.T Objectives

S.M.A.R.T. Objectives
Designate work with specificity. Carefully delineated duties and responsibilities of the workforce can help avoid or reduce misunderstandings and keep employees focused on restoring service and maintaining order.

S.M.A.R.T. Objectives

Select metrics that are measureable Be certain to align goals with the appropriate team and situation and ensure that data generated from this area is obtainable and applicable for assessment.

S.M.A.R.T. Objectives
Differentiate itself from other airlines as the airline that can get passengers to their destinations when they want to get there, on time, at the lowest possible fares while having fun.

Provide timely feedback and assessment.

SWOT Analysis

SWOT Strength & Opportunities

S
Safety Record

O
Continual expansion opportunities

Airline staff is highly trained and experienced

Technology advances can result in cost savings

SWOT Strength & Opportunities

S
Can Segment the market

O
Link-ups with other carriers can greatly increase passenger volumes

The product itselfAir Travel

Recessionary conditions suit LCCs best

SWOT Weaknesses & Threats

W
Airlines have a high "spoilage" rate

T
Global economic downturn

Aircraft is expensive and requires huge capital outlays

The price of fuel is now the greatest cost for many airlines

SWOT Weaknesses & Threats

W
Large workforces spread over large geographic areas

T
Government intervention

Difficulty making quick schedule and aircraft changes

Plague or terrorist attacks

Alternative Courses of Actions (ACAs)

ACAs
Attracting Customers
New customers can be attracted to a particular airline through advertising and special offers; existing customers may be retained by an individual airline via a loyalty scheme such as an airline club offering air miles and rewards.

ACAs
Fleet Management
Budget airlines such as Pegasus aim to maximize revenue from each airplane by selling as many seats as possible at low prices, with the first seats on any given flight usually available cheaply, the last seats being more expensive.

ACAs
Service Product/Promotions
The actual product--aircraft seating space, aircraft type, class of service offerings and booking ease--must be at least industry-competitive for success.

Recommendation
The core of the problem lies in the inability of Pegasus Airlines to retain old customers, the most wellbalanced solution to the problem will be ATTRACTING CUSTOMERS.

HOW ?
Via a loyalty scheme such as an airline club offering air miles and rewards.
The effectiveness of an airline's advertising may be measured by the amount of revenue generated in relation to the financial cost of promotion and advertising.

Presented to :

Dr. Oscar Gulmatico

Presented by :

Sheila Mae Rosary G. Serrano Mary Joyce C. San Pedro Kimberly O. Papa