What Airlines are doing to Survive the world economic turmoil

By Timothy Ijala
The last ten years have seen great changes in the world economy which has affected many industries including the airline industry. Increase in fuel costs, terrorist attacks, fierce competition and the economic recession have greatly impacted on the operations of the airline industry with many big names being greatly affected to the extent that some airlines have closed down or filed for bankruptcy (this is especially the case in the US). What can be done for airlines wishing to survive the economic downturn and fierce competition raging worldwide?
1. Join alliances. It no longer is safe to operate alone. This has led to the formation of what are known as alliances. This is where two or more airlines come together and agree to work together and benefit from doing so. Examples of these alliances are Sky team and Star Alliance. Alliances are beneficial in many ways. They include shared maintenance costs, economies of scale, more markets, access to the most advanced technology, etc.
2. Loyalty schemes. Also known as Frequent Flyer programs in airline lingo. These are used by airlines to reward customers who patronise, travel or use their services frequently. The rewards may include upgrades, priority consideration at check in, free tickets, free hotel accommodation in certain hotels to mention a few. Examples of these programs are Sheba Miles for Ethiopian airlines, Executive club for British airways or Cathy Pacific’s Asia Miles. There were fears that with the economic downturn airlines would not continue to honour their frequent flyer programs. However unless an airline falls apart overnight (which is very possible) they will generally continue to honour their FFP. Some however are now charging a fee for one to enjoy the benefits of their frequent flyer program. Others make sure that there are very limited seats on certain routes which can be used in exchange for miles flown. Also it is hard to tell exactly how many miles you need in order to fly for free on certain routes. The number of miles needed today to fly for free on one route may be increased tomorrow which can be very frustrating if you think you have saved enough to go on holiday which holiday you may have planned for some time.
3. Improved customer service. Customer service both on ground and in the air always has and always will attract customers to an airline. The past ten years have seen the rise in budget airlines especially in Europe and America which attract customers by charging low air fares. However some customers have said that they would rather pay more and get good service. It is no surprise that these customers are fiercely loyal to a specific airline even though others may come offering much cheaper fares. Airlines are responding to this by investing heavily in the quality of service that they offer both on ground and in the air. This includes in-flight entertainment, more comfortable seating and fast check in for their passengers.
4. Cost cutting. Many airlines are cost cutting through cutting back on staff wages and layoffs. Others are grounding aircraft, have stopped ordering new aircrafts and are suspending or withdrawing flights on certain routes where they were operating. Although layoffs save the airline a lot of money in terms of reducing its operating costs, it does also affect staff morale which may affect customer service and still cause the airline losses which is what it is trying to avoid. And it has not like in countries such as the U.S been successful in reducing the losses suffered by the airlines. It would be much more prudent for airlines to involve their staff members in finding ways to cost cut.