Presentation by CBS students on Star alliance

Represented by-NavoditSaurabh

RajanAjayAtul

Star Alliance is the world's first and largest

airline alliance.

Star Alliance currently has more than 21,200

daily departures, and serves 1,172 airports in

181 countries.

Launching date 14th may 1997.

Star Alliance has since grown considerably and

now has 28 member airlines.

An airline alliance is an agreement between two or more airlines to cooperate on a substantial level.

Alliances provide a network of connectivity and convenience for international passengers and international packages.

Cost reduction from sharing of: ◦ Sales offices ◦ Maintenance facilities ◦ Operational facilities, e.g. catering or computer

systems. ◦ Operational staff, e.g. ground handling personnel,

at check-in and boarding desks. Traveler benefits can include:

◦ Lower prices due to lowered operational costs for a given route.

◦ More destinations within easy reach. ◦ Shorter travel times as a result of optimised

transfers.

History Network Benefits

Before Star Alliance, global travel was complex and inconvenient.

Connections were uncoordinated, problematic and time consuming.

Network Benefits

20031999

20001997May 14Air Canada, Lufthansa, SAS, Thai Airways International and United Airlines launch the Star Alliance network.

OctoberVARIG Brazilian Airlines joins the Star Alliance network.

MarchAnsett Australia and Air New Zealand join the Star Aliance network.

OctoberWith an official Launch Event in Tokyo, ANA joins the Star Alliance network and Singapore Airlines officially gains Observer Status to join the Alliance.

MarchThe Austrian Airlines Group, comprising Austrian Airlines, Lauda Air and Tyrolean Airways becomes the 10th member of Star Alliance.

AprilSingapore Airlines joins Star Alliance.

JulyBritish Midland and Mexicana join Star Alliance.

MarchAsiana Airlines joins the Star Alliance network.

AprilSpanair joins the Star Alliance network.OctoberLOT joins Star Alliance.May – US Airways application approved

The Star Alliance Network continues to grow.

Network Benefits

Destinations 55Fleet 50

longhaul 5shorthaul 45

Annual Passengers 2.8mAnnual pax revenue $553mEmployees 4,100

Compare Lufthansa

222 mainline aircraft

49 m passengers

39,000 employees

Hubs in Philadelphia, Pittsburgh, Charlotte

279 mainline aircraft

47 m passengers

40,000 employees

Adding 100 destinations to the Star Alliance network

External Presentation .:. New Member to be .:. p. 11 .:.

Compared to other alliances, Star Alliance offers today

More flights – over 10,000 non-stop flights daily – an alliance member carrier flight takes off or lands every 4 seconds

More places – 128 countries and over 700 airports

Better connected – via coordinated schedules at key hubs

Benefits

Star alliance sky team one world

28 members 13 members 11 members Dest-1172 Dest-898 Dest-871 Rev-$156.8b Rev-$98b Rev-$90bPassengers per year- 672 million 385 million 335 million Future members-Air India china airlines kingfisher

26.9%

12.8%

18.4%

10.1%0.8%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Star Alliance SkyTeam oneworld

22.9%

19.2%

KL/CO/NW joining

Glo

bal

RP

K S

har

e 20

09

Source: IATA WATS, 2009

LX joining

A d vertis in g D irec t M arke tin g S a les P rom otion P u b lic R e la tion s P u b lic ity P erson a l S e llin g C yb b er M arke tin gIn te rn e t M arke tin g

ATM

StarNet links member airlines computer systems

It keeps passengers and information flowing

Allows more E-transactions, e.g. Interline E-ticket, PNR-Servicing, Schedule, Operational & Accounting Data Exchanges

Network

BTI Switzerland & Star Alliance - Key Account & Sales Workshop

Agent Educational Programme offered by Star Alliance Italy

Large geographic network. Cost savings via joint purchasing,

marketing, planning, etc. Higher number of flights offered. (increases

potential of sales) Relatively seamless travel experience. Code sharing. (Increased route

rationalization.)

Increased opportunity to reach economies of scale.

Assist in elevating brand awareness (i.e. Thai airlines, much greater exposure)

Facilities in airports. Services in regions. Seamless travel experience is inconsistent. Lack of innovation. Alliance is essentially a

facilitator, not an innovator. IT systems (incompatibility of systems)

Expansion in INDIA. Further integration of services (i.e. Facilities

in airports, services in regions, IT systems, etc)

Development of tools to measure effectiveness of alliance (metrics). i.e. Measure which passengers were brought in as a result of alliance. Also, measure the intangible benefits that the alliance exudes across the board.

Too many alliance members. Can lead to conflicts of interest, which in turn can lead to dwindling competitive advantage.

Airline industry is fragile which poses many uncertainties.

Terror threats 9/11,26/11. Rise in popularity of low cost travel carriers.

Poor integration can lead to lose of consumer confidence in the alliance.

(i.e. Ansett Australia went bankrupt in 2001 causes a huge disruption in baggage transportation resulting in negative publicity for the entire alliance)

Geographic :customers are located globally with varying wants and needs or behaviors and the organization attempts to exploit this by providing airline services to major cities/ routes evidenced.

Psychographic – attempts to capture what is driving the customer’s behavior, such as values. variations of cabin classes (First, Business and Executive Economy) to meet the product needs and wants of people.

Behavioral – Segmenting the market based on observable issues on consumer behaviour when consuming the products. Characteristics include frequency of consumption, buyer readiness and commitment. The corporate market tends to be a frequent flyer that could gain benefits from SIA’s Frequent Flyer program (KrisFlyer and PPS Club), in return for consumer loyalty to the airline.

Positioning is not what you do to a product; it is what you do to the mind of a client.

Target high-international travelers. The goal of the campaign is to help

travelers understand the benefits of the Alliance and

encourage them to travel on Star Alliance member carriers.

Marketing communications objectives

a)To develop Brand awareness.b)To increase demand/sales for offering.c)To change customer attitudes/perceptions

about the firm.d)To encourage repeat traveling.e)To become highly competitive.

Advertising design : all under one umbrella Type of appeal : humour Target people business class people Slogan : The way the earth connects Media selection : business journals ,

newspaper & television

promotional tools to be selected Television Business journals Corporate newspaper

Percentage of the budget

Television 20% Business journals & magazines 50% Corporate newspaper 30%

must focus on moving forward is to further integrate their services

more offering to customers a much larger travel coverage area, frequent flyer miles, etc.

create a more robust centralized IT infrastructure that integrates all systems.

develop the necessary tools to quantify the alliances absolute value.

Thank You