Tuesday, 12 August 2008 22:25
Coach Operators Can Do Anything Airline Operators Can Do
90% of passenger transportation in Turkey is made by road transportation vehicles. This remarkably high rate is caused by different transportation policies. In addition, coach companies contribute this fact since they have been developing theirselves and their services for such long time.
Nevertheless, recently, more and more passenger prefer airline transportation especially for long-distances day by day. Airline companies are able to sell tickets almost with the same price as bus tickets since they can buy fuel without paying private consumption tax.
On the other hand, passengers have higher demands and expectations. Due to this fact, coach companies should compete both other coach companies and airline companies in order not to lose their customers.
Coach companies should reduce their costs and also increase their sales in the same time in order to cope with growing competition. The first thing in to-do list is to choose the strategy to be followed and to implement the chosen strategy with strict decisiveness. However, the companies should listen their customer carefully in order to determine the strategy to be followed. The companies should listen its customers carefully and determine the requirements of its customers at first, then, action plan should be determined and constant feedback should be received during the implementation of this action plan. Lastly, improvements should be made within this action plan in compliance with received feedback.
Basically, there are three ways for the implementation of strategy:
- Focusing on price
- Focusing on standart service
- Focusing on luxury service
The message of the companies focusing on price should be “We are the cheapest”. Those companies should aim at passengers who say “I buy the cheapest ticket”. When this strategy is truly implemented with determination, extra service expectations of passengers such as luxury coach, catering etc shall be reduced in time. Passenger volume and income increase should be focused on for a successful implementation of this strategy. In addition, cost-saving and cheap options shall be evaluated for coach and service area investments and general costs, catering services etc should be minimised..
The message of the companies focusing on standard service should be “We offer good service with reasonable price”. Those companies should aim at the passengers who say “I buy standard service with reasonable fees”. Company executives should reduce their costs without making consessions on their service level. Those companies should use outsourcing companies whenever necessary and they should be capable of downsizing or expanding their coach-fleets according to the business volume. On the other hand, the service level shall be just a little bit higher than the overall expectations of passengers. Thus, flexibity shall be maintained whereas costs shall be minimised.
The message of the companies focusing on luxury service should be “We are expensive since we offer the best service”. Those companies should aim at the passengers who say “I am ready to pay more for luxury service” and should strictly follow the new passenger need trends to provide innovative services. Brand investment should me made for differantiated luxury service. The companies within this category should strenghten and higlight their brands by means of advertisement and promotion activities when passenger volumes are decreased. Also, those companies should follow each player within supply chain in order to provide constant and stable service quality.
Since fuel cost reaches 60-65% of total costs, coach companies should keep on their way with consistent professional management in order to get profit. The first condition of consistency is that every member of the company should know and apply the strategy to be followed. In Turkey, airline companies, much younger than coach companies, are able to apply professional management methods and technics and aforementioned strategies. Airline companies offer economic, standard or luxury service levels according to the requirements of customers, and reflect fuel costs, around 25% of total costs, to ticket fees.
If young and fresh airline companies are able to implement different strategies by focusing on price, standard service and luxury service in order to increase their revenues and market shares, it would not be difficult for highly experienced coach companies to apply same strageties to reach bright results.
