Skyline Airways Start-Up’s Revenue Focus

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Introduction

Skyline Airways is a Russian passenger-carrier airline, which specializes in regular and charter domestic transportation. The company’s major aim is to fill a niche of Siberian transportation and supply customers with the lowest prices in the market. Skyline Airways’ intention implies solving a hot-button issue in the Russian airline business, namely the necessity of improving communication between the European and Asian parts, making it broader and more affordable for the population (Kaminski-Morrow, 2020). Skyline Airways is determined to contribute to tourism development in the Asian part of Russia and relieve citizenry problems, who have to travel from one part to another regularly (Kaminski-Morrow, 2020). However, in the case of a successful start, there is a plan for further development, which includes entering the international passenger transportation market.

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Brief Description

The company’s general office is situated in Ekaterinburg, and Skyline Airways owns four hub-airports throughout Russia. They are Domodedovo in Moscow, Koltsovo in Ekaterinburg, Khabarovsk-new in Khabarovsk and Irkutsk airport in Irkutsk. As it is evident from the aforementioned, most of the hub-airports are located in cities of the Russian Asian part, which response to the brand positioning. Moreover, the company owns air technical service centers in such airports as Pulkovo in Saint-Petersburg, Domodedovo in Moscow, Koltsovo in Ekaterinburg, and Khabarovsk-new in Khabarovsk. The Skyline Airways fleet consists of the A320 family of aircraft of Airbus concern, and its feet size presents 50 items. The aircraft are well-appointed and are suitable for long flights above vast Siberian forests.

Skyline Airways have not entered any airline unions, however, it has concluded seven interline agreement with Russian airline companies, among which is Aeroflot, its affiliated undertaking Pobeda, and S7 Airlines. There is a possibility of concluding agreements with foreign airlines, for instance, Czech Airlines, Emirates, and Turkish Airlines, in the future in the case of scaling and entering the international market. Moreover, further plans include joining the International Air Transport Association.

Airline Revenue Strategy

As the company aims to improve domestic tourism in the Siberian direction and provide convenient flights for business and studying issues, the airline revenue strategy should involve both business and leisure travel. Obviously, the tourist season in Russia covers the end of spring, the whole summer, and the beginning of autumn, while during winter, traveling is in less demand. For this reason, it is essential to supply customers with more touristic destinations, such as Altay, the Baikal, Sochi, Gelendzhik, and others, from May to September. This way, the leisure route structures should be increasing at this time and decreasing during cold seasons. As for business travel, the focus is to offer convenient and affordable communication between as many as possible cities in the Asian part of Russia with the two metropolia, Moscow and Saint-Petersburg (Kaminski-Morrow, 2020). This route is extremely popular both for business trips and studying moves.

Skyline Airways is oriented to the low-price segment, so the necessity to approach pricing sensitivity should not be underestimated. First of all, it is essential to take into consideration the number of seats, which is about 160 items in Airbuses A320. Secondly, the amount of time remaining for purchasing plays a crucial role in pricing. Thirdly, the analysis of competitors’ prices should be conducted too. The leading peer for Skyline Airways in this field is Pobeda, the only and most successful low-cost carrier in Russia (Business Insight: Essentials, 2017). Considering the aforementioned aspects, the average price of a ticket for a mid-duration flight, for instance, from Moscow to Irkutsk, should not exceed the cost of 73$.

In order to receive a maximum profit and attract a maximum of customers, it is necessary to fulfill all determinants of airline passenger demand. As Skyline Airways is a budget option, the price should remain affordable for the population, whose incomes are below the average. Moreover, tourism is not an extremely popular activity, so aviophobia is a common sight among this segment. The confidence in the safety of flights and equipment integrity would be attractive for such people.

Another option of reaching approximately 100% figures for plane occupancy is concluding agreements with companies specializing in selling plane tickets. The most often used in Russia is Aviasales, which may be an effective option of promotion. Partner agreements with three-star hotel chains or hostels would be useful too, especially combined with some pleasant offers, such as giving discounts for accommodation in case of using Skyline Airways or otherwise. The major suggestion for attracting as much broad core audience as possible is launching a loyalty program. For example, discounts for the first flight with Skyline Airways would draw a vast audience of customers, and giving bonus points for each flight would be beneficial for sticking to this airline. This way, compared to other Russian airlines’ figures, the predictable customer traffic may achieve 3 million people in the first year of launching (MENA Report, 2020). These results appear to be beneficial and profitable in the Russian market.

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Conclusion

Skyline Airways is a startup in the airline business, which has the potential to become competitive and profitable in Russia and, later, the international market. The chances of success are high, as the company is indented to occupy the niche, which is insufficiently developed nowadays. Moreover, the launching would be beneficial for both domestic tourism development and solving the population’s problems with transportation within the country.

References

Kaminski-Morrow, D. (2020). Putin orders proposals for new far-east Russian airline. DVV Media International Ltd. Web.

MENA Report. (2020). Russian Federation: Russian airlines transported 7.97 million passengers, an increase of + 6.5% [operational data]. Web.

Pobeda airlines becoming largest operator of split ScimitarA winglets in Russian federation. (2017). Business Insight: Essentials. Web.

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BusinessEssay. (2022) 'Skyline Airways Start-Up's Revenue Focus'. 22 September.

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BusinessEssay. 2022. "Skyline Airways Start-Up's Revenue Focus." September 22, 2022. https://business-essay.com/skyline-airways-start-ups-revenue-focus/.

1. BusinessEssay. "Skyline Airways Start-Up's Revenue Focus." September 22, 2022. https://business-essay.com/skyline-airways-start-ups-revenue-focus/.


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BusinessEssay. "Skyline Airways Start-Up's Revenue Focus." September 22, 2022. https://business-essay.com/skyline-airways-start-ups-revenue-focus/.