Aloha Airlines: Marketing Strategy

Why Aloha Airlines Failed

Aloha Airlines had its headquarters in Honolulu, Hawaii. The Airline operated in Honolulu International Airport. It closed its operations on 31st March 2008 (Foster 44). The Airline collapsed due to several factors. These factors included increasing cost, economic withdrawal in Japan, the infamous 9/11 attacks on the Pentagon and the World Trade Center, the threats of SARS in 2003, and soaring jet fuel prices. The Aloha Airlines filed for bankruptcy protection twice so as to reduce its operational costs and to remain competitive in the air travel industry (Leas 61). The Airline experienced some pricing challenges that engaged it into fare wars with go! go!; its major inter-island competitor.

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The fare war resulted in Aloha Airlines experiencing losses that finally made it to suspend its passenger services operations. The shutting down of the airlines operations led to loss of approximately 1,900 jobs. All these factors made the Aloha Airlines Company services to be unable to compete with the same players in the air travel industry.

Marketing Plan to Revive Aloha Airlines

Executive Summary

This marketing plan clearly illustrates the Aloha Airlines marketing segments and strategies it will employ to revive the company’s operations. This plan will help the Aloha Airlines to regain its customers and also create a sustainable revenue stream. The Airline’s unique focus of offering airline travel services across the islands with a new twist will give the company competitive advantage over its major competitors by offering customers better airline services. The airline shall also expand its travel services to other parts of the world in order to enlarge its own customer base, increase revenue sources, and establish its global presence.

The Airline Industry and Its Opportunities

The air travel sector is still a large and developing industry. It is one of the major facilitators of economic growth globally. It facilitates the growth of tourism and trading between nations. This, therefore, implies that the air travel industry is not yet fully exhausted. In the past few years, the air travel industry has experienced a significant growth following its rapid expansion. Many companies are targeting the global market and the number of such companies is growing at high rate.

This presents the Aloha Airlines with an opportunity to revive itself and join other airline companies in providing international air travel services. There is a big opportunity for potential airline companies to enter the industry and make profits; therefore, it will not be impossible for Aloha Airlines to re-enter the air travel industry and start commanding high profit margins (Cabalatungan 1-3).

SWOT Analysis for Aloha Airlines

This analysis helps the company to provide some critical external and internal factors that are strategically important to the operations of the company (Carlock and Ward 154).

Strengths

  1. The Aloha Airlines has competent managers and staff; it is important to note that the collapse of the Aloha Airlines’ passengers services was due to external factors and not incompetence of the company’s administration
  2. Ability to set relatively low flight fare
  3. The company is able to comply with International Air Transport Association standard codes
  4. The company has the ability to get potential investors willing to offer revival capital investments
  5. The Aloha Airlines company is already known in the air travel industry

Weaknesses of Aloha Airlines

  1. Inability to cope with rising fuel prices
  2. The company has low capital base
  3. The company has liquidity challenges: the company shut its passenger operation services due to the fact that it could not meet its debt obligations.
  4. Aloha Airlines is unable to set competitive prices to make it compete favorably with other industry players.
  5. Operating within a relatively small geographical region as compared to other players in the industry
  6. The passenger services were totally shut down and the airline must start a fresh from the scratch.

Opportunities

  1. There is a growing number of international companies engaged in international trade; this provides the company with expansion opportunity
  2. The flourishing tourism industry also provides an opportunity for the Aloha Airlines to expand its operations to cover such areas where there is tourism boom.
  3. The global economic recovery is set to enhance both domestic and international business; Aloha Airlines has the opportunity to take the advantage of the recovering global economy and re-launch its operations.
  4. There are large numbers of potential airline employees who are ready for employment immediately. This implies the Aloha Airlines is able to get readily available cheap labor force.
  5. There are many potential investors who will be willing to invest in the airline. This means the Aloha Airlines will not lack start up capital for its major operations.

Threats

  1. Increase in the fuel prices may negatively affect the operations of the Aloha Airlines company
  2. The already established and rapidly growing competitors
  3. The possibility of another global economic recession.
  4. Threats to bankruptcy suite by the company’s creditors and unsettled stakeholders
  5. Adverse forms of weather change that may interrupt its operations.
  6. High cost of operation

Competitors’ Analysis

There are already established airline operators in the industry. Some of the main competitors are Hawaiian Airlines and Aloha Air Cargo; Aloha Air Cargo was part of the Aloha Airlines Company before it stopped its passenger operations. The Aloha Air Cargo is operating under new management. The competitors operate on a global scale and already enjoy economies of scale. They have large numbers of customers some of whom are loyal, they enjoy high level of liquidity and professionally trained staff members. However, the main competitors are not able to efficiently handle the large numbers of travelers.

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In many cases, there are delays in departures and arrivals making passengers to feel dissatisfied by some of the airlines. The airlines are also relatively expensive and due to the fact that there are no viable alternatives the passengers are forced to bear the expensive cost of traveling. This provides Aloha Airlines with a better opportunity to start competing profitably with the competitors (Grant and Bendure 535). According to Wolfe and NewMyer (5), the airlines in general have been experiencing financial challenges. This has forced them to reduce their fares hence forcing their competitors also to reduce their fares.

Segmentation and Target Market

Segment 1

The Aloha Airlines Company should target the business segment of the air travel industry. The numbers of international businesses transactions have increased over the years and are set to go on that way in the coming years. The increased international business transactions necessitate that people travel abroad. There is therefore the need to provide quick and efficient airline services. The company should therefore carry out a survey on specific passenger groups and destinations. The cost of this survey should be included in the start up capital for the whole operations. The Aloha Airlines should target 80% booking of its airline tickets on daily basis.

The company in order to attract more customers in this segment, the company should offer relatively cheap fare prices at its initial stages of operations. The Aloha Airlines should establish its booking offices within the major towns especially close to international corporations. It should also provide commercial extra services like operating car rentals at cheap prices and provide appropriate incentives to attract customers.

Segment 2

The company should also focus on operating in the tourism segment of the air travel industry. There are many international tourists traveling to other countries for leisure purposes. These tourists require complete travel package. The company can make arrangements with different tourism service providers in order to help facilitate the tourists travel operations. The company can organize for the tourists to be picked from the airport and dropped in their respective hotels at relatively cheaper costs. This will attract more tourists to use the company travel services. The segment can be reached through establishing partnerships with various tour operators who will integrate the company’s services into theirs hence the possibility of gaining customer loyalty.

Branding and Promotion Mix

In order to re-launch its travel services, it will be important for the company to re-brand itself. Re-branding the company product services will give the company a new look in the air travel industry. This will also ensure that the company regains the touch it lost with the people and get a proper image that will enable it to compete with the already established industry players. Since the company will venture into more services and expand its geographic operations, re-branding will accommodate all these new changes in the company’s services.

One of the most important thing to be done in the process of reviving the Aloha Airlines Company is to come up with a well planned promotion mix that will effectively ensure that the company’s travel products are well positioned in the travel industry market segments. The promotion mix that could be used by the company is as follows:

  1. Advertising: the company should use the cheapest, most effective and available advertising media. The company should appropriately use the local media like radios, television, and print media. The company should also consider using online advertising sites and billboards. It will be important for the Aloha Airlines Company to make use of brochures, fliers, direct mails, newsletters, email messages, and posters.
  2. Sales promotion: in order to attract more customers the Aloha Airlines should engage sales promotional activities. The company can offer price deals (e.g. bonus packs) and the rebates to the loyal clients.
  3. Personal selling: this is where the company representatives engage in face-to-face activities during the process of promoting the company’s products. In this case the main role of the sales representatives include but not limited to finding new customers, getting into contact with potential customers and answering any enquiries, communicating with both existing and potential customers, gathering crucial business information for the company and also providing support services to customers (Sindell 353).
  4. Public relations: for the Aloha Airlines Company to gain complete revival, it is important for the company to have a strong public image. Public relations will ensure that the company is positively perceived by both existing and potential customers. The company should consider having a strong public relations office to deal with its public image.

Other strategies

The company can also use the following strategies:

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  1. During its initial operations it should offer low priced tickets to travelers. This should take one year.
  2. From the second year of operation the company should focus on boosting consumer confidence by creating a marketing campaign that emphasizes the value and quality of the product.
  3. Overcoming objection: in the process of marketing the company is likely to encounter objections; to overcome these objections the company will require to use warranty offers, endorsements from loyal customers and testimonials. This will be most successful after the company shall have established loyal customers.

Unique Selling Proposition, competitive advantage

Unique Selling Proposition, competitive advantage constitutes what will make the Aloha Airlines compete favorably above its competitors. These are what will the company look unique as compared to competitors. The company should consider offering slightly lower ticket prices, using contests promotion, offering free gifts in some instances, referral programs and use of various techniques of reminders. If most or all of these Unique Selling Proposition and competitive advantage are utilized, the company has the potential to grow and compete in large scale level with already established industry players.

Corporate Social Responsibility

Every business enterprise is nowadays engaged in Corporate Social Responsibility. There are benefits that accrue due to CSR. Through CRS, the Aloha Airlines will be able to demonstrate that it is a responsible corporate citizen. The CRS enables companies to attract and retain prized employees. This will be very beneficial to the Aloha Airlines. It will also be able to avert rapid staff turnovers and create strong incentives for accountability in labor performances. Through CRS, Aloha Airlines will also be able to develop unique selling suggestions and competitive benefits through its products; it will increase its operational efficiency, reduce cost and establish an improved reputation for its business services.

Works Cited

Cabalatungan, Krizia M. “Airline Industry: Description of the operation.” Scribd, 2009. Web.

Carlock, Randel, and Ward, John. Strategic planning for the family business: parallel planning to unify the family and business. New York: Palgrave Macmillan, 2001.

Foster, Jeanette. Frommer’s Hawaii 2010. Hoboken: Frommer’s, 2009.

Grant, Kimberly., and Bendure, Glenda. Hawaii: Lonely Planet Hawaii. New York: Lonely Planet, 2005.

Leas, Cheryl. Maui for Dummies. Hoboken: For Dummies, 2009.

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Sindell, Kathleen. Investing online for dummies. Hoboken: For Dummies, 2005.

Wolfe, Harry., and NewMyer, David. Aviation industry regulation. United States of America: SIU Press, 1985.

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