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How Air France could be differentiated from low-cost carriers?

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  1. Introduction.
  2. Review of airline business.
    1. Types of airlines.
  3. Understanding the business.
    1. The core and the secondary expectations.
  4. Different ways of development.
  5. Conclusion.
  6. References.

The objective of this investigation project is to show, analyse and discuss about the way that Air France would fight against low-cost carriers in the same market. In our contemporary world, the airline industry is one of the most important tools in globalization, making possible travels and communications. After the 11th September 2001 the airline industry had several changes. It needs to reinforce its place in the market because of this event the global image of the market had been injured. Business generally travellers are influenced by airport commodities, service on board, and convenience of timing whereas leisure travellers are influenced by price and airport convenience. A third sector exists: charter travels, it can be assimilated in leisure segment. This segment is working linked to travel industry, and according to the official report from DGAC (2005) (French civil aviation authority) the traffic involved is less and less important, and it can be easily assimilated in leisure segment. Thanks to Porter's forces (1980), we can consider that charter travels are not real substitutes of Air transport (because of their product itself).

[...] In addition to that Porter (1995) said that essence of strategy is choosing to perform activities differently than rivals It could be a good way of retaining customer for Air France to keep its strategy as product and service differentiation by offering more of one to one service. Airlines have to drive their revenue management well to avoid their profit falling. Ever according to Nason (2006) there are four important drivers in managing revenue management: - Make the price transparency (explain fees, fares, etc . [...]

[...] Porter (1991) takes to consideration the supplier power, in this case, for Air France the supplier power is relative because some things in the value chain are done by Air France (for example Servair company (In Flight meal supplier) is a part of Air France group) but air transport needs also lot of supplier (which are most of the times the same for all airlines). Thus supplier power could be a threat only if fuel is not delivered well or airports get closed. [...]

[...] Air France is one of the major airlines in France, its business is in favour position but there exists a major threat of substitutes coming from low cost airlines and French TGV. Air France has a big brand identity through transportation travel and transportation business (thanks to its famous TV advertisement which had been awarded several times). Its service has an important product differentiation thanks to the airport lounge, beautiful and smiling staff, and excellent service. There exists also a element which have to be taken in consideration, it`s the fact that flying it`s obviously more than ever transportation medium. [...]

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