Presentation Outline Presenter Haris Naved Ahmed Subject Managerial Communication Task Individual Presentation Date June 21, 2014 Situation The new Chief Executive Officer of Samoa Air has asked to reduce the operations cost in the airline system. Chief Operating Officer comes up with an innovative idea through which the cost will be reduced and profit will be increased My Role Chief Operating Officer Audience Role Chief Executive Officer
Samao airline Pay for Your Weight
Aug 07, 2015
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Presentation Outline
Presenter Haris Naved AhmedSubject Managerial Communication Task Individual PresentationDate June 21, 2014
Situation The new Chief Executive Officer of Samoa Air has asked to reduce the operations cost in the airline system. Chief Operating Officer comes up with an innovative idea through which the cost will be reduced and profit will be increased
My Role Chief Operating OfficerAudience Role Chief Executive Officer
What is SAMOA?
An Island located at the center of Pacific Ocean
Famous for tourism, food, cultural heritage and natural wonders
Samoa Air Route
Samoa Air flies to 10 destinations
Popular Destinations SamaoAmerican SamaoNiueNorth Cook IslandsFrench Polynesia
It operates scheduled flights between the domestic islands as well as to American Samoa
Samoa Air Fleet
Aircraft Total Passengers Capacity
Britten-Norman Islander 10 50
Current Operational Cost
1990 2000 2010 20140
0.5
1
1.5Cost of Jet Fuel (US$/Ltr)
Years
Fuel
Cos
t (U
S$/L
tr) Cost of fuel increased to 400% in 30 years
1990 2000 2010 20140
20
40
60Samoa Air- Profit to Operational Cost
Years
% P
rofit
to
Ope
ratio
nal
Cost
)
Profitability decreased from 50% to 20%
Current Fare
Current Fare
No. of Passengers Distance between two destinations Total Air Ticket Cost
1 passenger 500 km US$ 120
50 passengers 500 km US$ 6,000
A flight carrying 50 passengers will generate US$ 6,000 revenue
A passenger with 60 kg weight is charged US$ 120
A passenger with 100 kg weight is charged US$ 120
What is the new system?
4 kg apple = US$ 10
'Pay only for what you weigh'!
This is the fairest system for payment of carriage of anything by air
2 kg apple = US$ 10
How does the pay by weigh system works?
Ticket Cost = Total weight x Sector fare per kg
= 100 kg x US$ 1.3/kg
70 kg 30 kg 100 kg
US$ 130 Free
upto 3 kg extra weight
This is how the online form will appear
What do we do ?
standard seats special seats
Other Airlines
100 kg
US$ 12060 kg
US$ 120
100 kg
US$ 13060 kg
US$ 78
2
1
Samoa Air
New Fare Calculation Method
Results of survey conducted by Samao Air : Weight Distribution in a aircraft of 50 passengers
No. of Passengers
Average Passenger
Weight
Average Baggage Weight
Total Weight Air Fare Total Air Fare
35 90 kg 25 kg 115 kg US $ 150 US $ 5,250
12 75 kg 25 kg 100 kg US $ 130 US $ 1,560
3 45 kg 25 kg 70 kg US $ 90 US S 270
Total US $ 7,080
A flight carrying 50 passengers will generate US$ 7,080 revenue
Cost of Ticket = US $ 1.3/kg
Benefits of New System
Existing System
Passenger Weight Air Fare
60 kg US $ 120
100 kg US $ 120
New System
Passenger Weight Air Fare
60 kg US $ 78
100 kg US $ 130
• Pay what you weigh system will increase the total revenue by 18%
• Attract more customers because they will get special seats
• Passenger will only pay for the weight they carry
Our partnership with World Heath Organization
Samoa is amongst the top 10 countries for obesity levels
Samoa Air has also signed a Memorandum of Understanding with the World Health Organization (WHO) which states that the new airline's new payment policy will also help promote health and obesity awareness
Once the new system will be launched SAMOA AIR and WHO will sign a partnership against obesity agreement
Passengers questions to Samoa Air
Question 1Hey I lost weight since signing up... (Or my bag fell off the bus!)
We always reserve the right to either compensate or not… Your lost weight will be reimbursed
Question 2I just bought a diving kit on the way to the airport…its only 30 kg
We may be able to put it on the flight… but it will cost its weight
Passengers questions to Samoa Air
Question 3One of the kids got crook and is staying home…
Call our 24/7 line otherwise it might be a done deal… only refundable 48 hours before travel
Question 4I had a great time and my return weight is 5 kg over
You might have to pay for that burger you had…..we don’t charge for extra weight up to 3kg on total weight
Question 5I had a lousy time and I lost 10 kg weight
Sorry…can we suggest a nice seat by the window
Thank youYour questions on the new system will be appreciated
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