Essay on Song Airlines Business Case

920 Words Oct 19th, 2007 4 Pages
Song Airlines Case

Song airline was a low cost carrier subsidiary of Delta airlines that started in 2003. It was formed to compete with JetBlue and other low cost airlines for the Florida market. The market environment at the time of the case was extremely difficult with the rising costs of fuel, increasing security requirements after 9/11 and customers' expectations of lower fares. It has forced many big players in the airline industry into bankruptcy. The operational costs which include gate fees, ground operational costs etc. were increasing causing even more problems for the airlines. The fares in the Florida route were decreasing while the costs were ever increasing making it difficult to remain operational in that space.
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3. Lowering ticket costs. This was one of the core strategy concepts that Song used in its business model and addressed quite well.
4. More in-flight services like entertainment, internet access. Song already did a lot of this at its time but incorporation of internet access could be done by Song.
5. Customization of services like premier seats, access to airline lounges etc. This was something Song shied away from based on its business model but there is growing evidence that customers are expecting more customized service and hence Song would have to address this with different package offerings.
6. Better management of the airline fleet – logistic efficiencies. Song had a pretty good operational model for this.
7. Better people productivity – flight attendants, pilots and ground support staff. Song had creating strategies for increasing people productivity.
8. Better financial management – like hedging on the fuel prices (like the way Southwest airlines has done successfully recently during the fuel cost inflation). Song could learn by using sophisticated financial models to gain financial advantage.
9. Expanding to other markets. Song was part of Delta which was serving other markets – but I think Song could have expanded its service to other areas like Las Vegas or southwest and other tourist destinations.
Some of the threats are:
1. Increasing fuel prices. Song should have a good financial model for countering the increasing

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