Overview of the Airline Industry

The global airline industry includes air transport service providers of passenger and cargo. These services are used by individuals and business, and governments around the world. Since the start of commercial air traffic, the airline industry has been marked by high growth compared to the GNP trend and continuous productivity increases. The airline industry is also characterized by intense competition with intense price pressure that involves a continuous requirement to enhance efficiency. Increasing demand from emerging economies, the constant demand for new low-cost carriers, deregulation, and rising middle-class populations are factors driving the growth of the industry.

However, there are a few factors that are expected to influence the growth of the airline industry.

• Air Traffic and Competition: Firms operating in the industry space face significant pressure to consistently realize their real revenue growth and profitability potential although they compete against low-cost carriers (LCCs), ultra-LCCs, legacy network carriers, or even those considered hybrid.
• Customer Expectations: Today, the ability to manage customers’ expectations relative to their shopping experience is more important than ever before. Especially, how they purchase online, will convey what customers are expecting out of the airline services.
  

  

The Business Challenge 

The client, a leading airline industry client wanted to transform their finance and procurement functions. The client also recognized the need to increase the contribution of procurement delivered to the business and ways to make the necessary changes while operating in a fast-paced and highly competitive environment to maintain operational delivery and ensure continuity of supply.

Solutions Delivered 

To implement and embed category management principles while maintaining their current delivery, SpendEdge tailored a comprehensive research methodology. The research approach comprised of primary and secondary research coupled with qualitative and quantitative data collection procedures. During the course of this category management engagement, the airline industry client was able to introduce a robust spend analysis with a standard category structure that aligned to their business. They also standardized processes and training to support the adoption of the new practices and increase capability and measured performance at executive, functional and category team levels of detail. The category management engagement assisted the airline industry client in deploying a standard category management process to decrease commercial risk and procurement cycle times. The client was also recommended category strategies with a long-term view and focus on priority initiatives.

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