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The Travel and Tourism Business Toolkit - Airline Industry

Added on - 08 Dec 2020

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The Travel and TourismBusiness Toolkit
Table of ContentsINTRODUCTION...........................................................................................................................1PART 1............................................................................................................................................1Presenting the key principles of revenue management and its application............................1PART 2............................................................................................................................................4Presenting the performance management plan.......................................................................4PART 3............................................................................................................................................4Describing the potential impact of legal and ethical consideration on British Airways........4PART 4............................................................................................................................................5Presenting the importance of suitable financial data for British Airways..............................5CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12
INTRODUCTIONTravel and tourism are the most important sector that contributes the biggest part for thegrowth of economy and tourism is travel for business and a practise of touring in which theirbusiness is to attract wide range of visitors. The report main aim is to understand the business oftour and travel and it is based upon British Airways which is one of the largest UK airlines andoffer luxurious services to their passengers. The report present the key principles of revenuemanagement and its application to the airline industry. Further, report describe the HR life cycleand the importance of HR plays in each stage and then it develops the performance managementplan in order to support the job role. Moreover, through article report presents the potentialimpact of regulation, legislation and ethical principles on decision making in airline industry.Lastly, through different financial data, report presents importance of those documents in airlineindustry.PART 1Presenting the key principles of revenue management and its applicationRevenue and Yield Management:Both the terms indicate the income management andit is the capacity management system whose aim is to maximize the business volume. Further,this is basically designed in order to control the capacity in such a way that helps to get highreturn (Shihab and et.al., 2019). On the other side, revenue management in travel and tourismindustry is the application of price discrimination in which it demands of service which variesseasonally.Principles of Revenue management:In airline industry, the capacity is fixed and due to this the number of accommodation isalso fixed.Customers are also made reservation in order to book their seats.The demand is higher at weekend times and summer holidays as well.The cost of the offered services are fixed and as the booking in British Airways are doneon online which means that they earn high amount of percentage (Capocchi, 2019).There are different ways which are applied by airline industry in order to use revenuemanagement tools for maximizing profit and some of them are as follows:Capacity Utilization:Yield per management is the effective tool that is mostly used bythe airline industry whose main aim is to maximize the revenue of the company and it has three1
essential domains such as pricing strategy, control of availability and inventory control. Forexample, British Airways use this strategy in order to attract visitors such that they offer the seatsat discounted rates and during holidays time, the customers are willing to pay whole amount. Onthe other side, when the dates are come closer the airlines, goes up their prices and it helps tomaximizing the profit and help to generate the revenue (Pricing strategies for airlines,2018).Discount allocation:This is another strategy which is used by the industry in which theydetermine the number of seats to allocate for discounted fare versus full fares. Such that BritishAirlines, makes some reserve for discounted prices and some seats are of full fares because whensome seats are protected and some are vacant it means that the company bear loss. That is why itmakes discount strategy.Late booking strategies:In this strategy, British Airlines also adopt this strategy inwhich when the booking dates are come closer than the company raise the fares of the seats andthe customers have to pay such amount. This strategy is consider one of the most important andeffective strategy in order to generate higher profit as compared to others.The airline industry also uses different variety of differentiated pricing strategy in orderto generate high revenue and even it is also analyses that most of the airline including BritishAirlines also used differentiated pricing to sell their air services at different prices to differentsegments (Capocchi, 2019). Moro ever, the carriers also attain it by dividing each of the cabininto number of travel classes for pricing purpose and this is called buckets at higher and whenthe dates come close, its price are raise higher.2
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