FLYBABOO

HOW HIGH CAN IT FLY?

Aldy Maulana 29116447
Haryaman Justisia 29116489
Dwi Purwaningsih 29116403
Adimaz Fernando 29116458
 Case Background
In July 2003 Swiss International Air Lines (successor to the
bankrupt Swissair) announced drastic reductions in its network.

Some regional routes were abandoned and withdrawn from the

schedule

The market gap provide the perfect launch pad for Julian Cooks (the CEO of
Flybaboo) new idea, a regional low-cost airline to fill the growing hole created by
the gradual retreat of Swiss from low-volume routes out of Geneva.

FOCA released new regulations that banned landings at Agno with aircraft that
did not have certification for descents at more than six degrees.
EKSTERNAL ANALYSIS
Bargaining Power of Suppliers :
Moderate
Limited number of
aircraft manufacturers
High costs of switching
There arent many
current and potential
suppliers in this industry
Threats of New Entrants : Low
High capital investment
Threat of World economic
New Entry regression
Flight regulations
Low-volume routes
abandoned by Swiss

Supplier Competitive Buyer Power

Power Rivalry

Bargaining Power of Buyers :

Threats of Substitute : Low Low
Available substitutes have Customers are price
performance limitations sensitive
and/or high prices that do No switching cost to
not justify their use as Threat of competitor and substitute
mainline products. Subsitution Customers are
Customers are not likely to knowledgeable
go for substitutes.
INTERNAL ANALYSIS
 RESOURCE
Tangible
Financial Resources
Physical resources
Technological resources
Intangibles
Human Resources
Innovation Resources
Reputation Resources
Description
Have many investor that interested to
invest, sales growth
Airplanes Dash 8-300
Air Operator Certificate (AOC) for a short
period of time by wet lease from
Lufthansa partner Cirrus Airlines.
Description
Flybaboo CEO had a lot of experience in
airline industry and aviation finance.
Flybaboo using information system for
reserved ticket
Low price for early booking
Target tourists and business travelers
 CAPABILITIES
Functional Areas Capabilities

Marketing & Sales Enhance demand by offering low fares to

limited number of passengers who
booked early

Distributions With sales of electronic ticket exclusively

via Flybaboo website or call center

Operations Cook wanted to keep operating costs to a

minimum
Capabilities Is the Is the Is the Is the Competitive Performance
Capability Capability Capability Capability Consequences Implications
Valuable? Rare? Costly to Nonsubstit
Imitate? uable?

Enhance
demand by
offering low
fares to limited Average
Temporary
number of returns to
Yes Yes No No Competitive
passengers who above-average
Advantage
booked early returns

With sales of
electronic ticket
exclusively via Competitive Average
Flybaboo Yes No No Yes
Parity returns
website or call
center

Cook wanted to
keep operating Competitive
costs to a Yes No No Yes Average return
Parity
minimum
STRATEGIC
 FlyBaboo Strategic Innovation
Traditional EasyJet FlyBaboo

VALUED CUSTOMER Everyone, especially People who pay from Niche market for short-
business class their own pockets and haul point-to-point
some who dont fly traveller
VALUE PROPOSITION Flexible One-way fares
Full Service Refunds, if plane is late
Worldwide Network No seat choice
High prices Low prices
No meals
VALUE CHAIN Price and brand

Purchasing Integrated Outsourced Outsourced

Operations Multiple planes for mix of Short-haul routes Point-to-point short-haul

short and long haul travel Single type of plane routes
Worldwide network Select destinations Single type of plane
No catering on board
Marketing Segmented customers Treat all customers the Low price for early
Varied meal services same booking
Frequent flyer program Focused Target tourists and
business travelers
Distribution Travel agents Direct sales/internet Direct sales: internet or
Bundling possibilities call centers
 Strategic Competitive
Flybaboo needs to establish its brand name as
economics (Low) cost airlines with good service
and quality.
Flybaboo should extend its flight routes and
different destination
Flybaboo should focus on financial stability with
minimum operating cost
Flybaboos marketing and sales division must
build Flybaboos brand equity by earning trust
and loyalty from its customers (Loyalty brand)
THANK YOU