Case Study: Boeing 787-9 for Australian International Airlines

This case study examines the potential of the Boeing 787-9 for Australian International Airlines (AIA), focusing on its capabilities and strategic advantages. The analysis begins with an overview of the aircraft, highlighting its capacity, range, and efficiency, and then explores opportunities for AIA to expand its routes, products, and services. The study proposes new routes in Asia, considering factors like population density and market demand, and suggests optimized flight schedules. It addresses pricing strategies, in-flight service enhancements (catering, entertainment, loyalty programs), and fleet optimization through aircraft interchangeability. The case emphasizes the Boeing 787-9's role in enabling AIA to compete effectively in the airline industry, offering a detailed plan for fleet management, route expansion, and business model innovation based on the aircraft's capabilities and market trends.

CASE FOR BOEING 787-9
CASE FOR BOEING 787-9
NAME OF STUDENT
NAME OF UNIVERSITY

BOEING 2
Introduction
The Boeing 787-9 is a dual aisle and mid size jet .Its capacity is at 242 to 335 passengers .It is
a twin jet with a cruising speeds of 903 kilometers per hoour.It has been in production since 2007
with 871 units being sold ,which 476 have been delivered. Its range is 14,800 kilometers
(Akanksha, 2019). At least eight airlines are operating more that 30 787-9s planes. The plane has
flown 300 million passengers and made 1.5 million trips.Among the airlines that use this plane are
All Nippon airways,American airlines,Air Norwegian and Air Canada with each having more than
30 planes.
The price of a new 787-9 is now at $ 110m.
Opportunities
This plane affords Austalian International Airlines (AIA) the chance to chart new paths by
increasing the routes ,products and increasing the services in the existing networks.
The range for the Boeing 787-9 is 14000 km non stop. This will see AIA reach more routes
even with the set limit of 10,000km. With this range the plane can make inroads in the populous
countries and cities like India,South Korea ,Singapore ,Tokyo and Hawaii.
The plane can carry 240 seats. The seating capacity can be configured to reach 330 seats. This
seating capacity is favoured as the planes will fill up faster that .This seating arrangment can be
used to meet the demand mix for business class and economy as and when required. The
configuration has space for the crew to also unwind.
This plane has a speed of 903 km per hour which is within the acceptable range of long haul to
mid haul distances.
The plane cost is also declining due the competition between Airbus and Boeing planes. An
order for many planes can have steep discounts. According to Wikipedia Contributors,2019, the
current price is quoted at $110 m. This declining price is an advantage as the capital outlay
required to acquire the fleet will not be as high as budgeted since the actaul price will definitely be
lower that quoted. This also applies to the leasing option. Acquiring the planes at a discount will
enable AIA to have a competitive edge in pricing.
The comercial operations of this plane fare well with competion.AIA will of course invest in
new technology and human capital to manage this fleet. However ,looking into the industry trends
according to Zhang (2018), this will be the right decision.Looking into the future ,Boeing planes
will dominate the medium and long haul in the foreseable future.
Case for the new business model
The existing service routes of 10 services per day across six cities in four countries . The six
routes are served by 10 leased planes. According to IATA (2019), Asia pacific will be the biggest
driver of air traffic demand. With this information ,these new 11 routes that should be considered.
The cities are populous ,are in Asia and AIA can get a slice of the economy market with the right
pricing and reliability.
City
Distance from
Melbourne in KM
Servic
e
Beijing 9000 3
Mumbai 9800 3
Kolkata 8900 1

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Seoul 8500 2
Tokyo 8100 2
Shanghai 8000 1
Yangon 7900 1
Hanoi 7600 1
Manila 6300 1
Singapor
e 6000 1
Jakarta 5200 1
Since we have 20 planes,we still have 9 planes to allocate. Looking inward in the existing
routes ,all routes with more that 80% consitent booking deserve an extra service. The extra service
will be spaced in interval of six hour for routes on one service. For routes with two service and
deserve another service ,we will space the services to a minimum of four hours.
It is very important for the scheduling to be synchronised to avoid lengthy waiting for planes in
runaways. The lenghty waits in airports is expensive due to the parking fees and cost hosting the
crew.
Schedule
Current
service
Proposed
service
Melbourne-Auckland
3 services per
day 3
Melbourne-Christchurch
2 services per
day 3
Melbourne-Denpasar (Bali) Daily service 2
Melbourne-Nadi(Fiji) Daily service 2
Melbourne-Noumea(New
Caledonia) Daily service 2
Melbourne-Wellington
2 services per
day 2
A review of routes that Qantans have abandoned indicate that the following routes are
profitable. According to (Smith, 2019) ,these are Darwin and Alice Springs. The routes should be
served by scheduled flights and on the low cost model. Preferable frequnecy is two times a
week.The fortunes of the towns are looking up despite the depressed demand.
The pricing for the new routes have to be competitive to gain clients and also be sustainable. A
review of the average ticket prices indicate that AIA should price its tickets within this range for
the new routes.
The competitors in these routes are the national airlines for the respective countries. These airline
offer direct flights as opposed to non-national airlines that will have to first send their clients to
their hubs and then connect them to their destination later. AIA can use Melbourne as a hub and if
need be look for another interconnecting hub.
City
Average
ticket
cost
(AUD) Source
Beijing 1420 https://www.webjet.com.au/flights/beijing/melbourne/
Mumbai 1040
https://www.expedia.com.au/lp/flights/mel/bom/melbourne-to-
mumbai

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Kolkata 1036
https://www.expedia.com.au/lp/flights/mel/ccu/melbourne-to-
kolkata
Seoul 3952 https://www.webjet.com.au/flights/seoul/melbourne/
Tokyo 1546 https://www.webjet.com.au/flights/tokyo/melbourne/
Shanghai 2766 https://www.webjet.com.au/flights/shanghai/melbourne/
Yangon
1
238
https://www.expedia.com/lp/flights/rgn/mel/yangon-to-
melbourne
Hanoi
2
179 https://www.webjet.com.au/flights/hanoi/melbourne/
Manila
88
5
https://www.expedia.com.au/lp/flights/mel/mnl/melbourne-to-
manila
Singapor
e
2
061 https://www.webjet.com.au/flights/singapore/melbourne/
Jakarta
2
155 https://www.webjet.com.au/flights/jakarta/melbourne/
As AIA shifts from a low cost airline to a mainstream player,it has to offer superior inflight
services . These services can be a differentiator for some discerning clients. It is very important that
this aspect of the flying is positioned well. Catering is outsourced to the many companies who have
built expertise in the catering field. Catering should be customised such that flights flying in the
morning,breakfast shuld be served. Flights flying during luchtime,lunch should be served. The
industry standard is that meals are free. The meals can also be customised such that the meals
offered reflect the However ,options can be added to the meals which will require the cleints to pay
for. These are like alcoholic drinks. Other items that can be offered for free are like blankets and
pillows.
In the same breadth ,airlines have shops where clients can buy stuff like perfumes and other small
designer items. AIA can adopt this model and include the AIA memorabolia like
caps ,tshits,hoodies ,wrist bands and scarfs.
For entertainment ,the plane comes with its standard entertainment suites. However the selection of
the media items can be decided by the airline to reflect the diverse nature the clients (Relaxnews,
2010).
Then we have the loyalty programme which rewards the frequnat flyers. The programme can
attract new to AIA clients and retain the existing ones. The loyalty miles can be redeemed by
upgrading from economy class to business class.
AIA will then invest in a lounge to be used by premium ticket holders or any other criteria to be
determine by AIA.
Other aspects to be considered are legroom and seat width. These should be comfortable and
customised depending on customers depending on destination of the plane.
The new planes will give AIA the flexibility to switch planes to where they are most suitable
and economical to operate. The 787-9 and A330-200 could be well suited and preffered to a
specific route and are interchangeable.

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Conclusion.
The case for shift to Boeing 787-9 is overwhelming from the range capability and seating
capacity of the plane. The preference is for planes with around 250-350 seats as they will fill up
faster and can be accomodated in many airports in the world. This will enable AIA to enter new
routes. The plane is also the most fuel efficient in its range.
The plane will offer AIA the flexibilty to optimise the fleet by interchanging the plane models
as demand and preferences dictate. The planes will also offer the flexibility of changing the seat
configuration to meet demand.
The steep discounts offered to buy the plane also offers a competitive edge for AIA. The
discounts will make the capital outlay to be reduced. The savings in reduction can be reallocated to
other enhancements required to make the fleet ready to take on other seasoned airline operators.
The new planes will offer AIA the opportunity to enter the high lucrative normal airline
segment.

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Reference list
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[online] Grin.com. Available at: https://www.grin.com/document/307979 [Accessed 21 Aug.
2019].
IATA (2019). Asia Pacific Leads 20-Year Passenger Demand Forecast. [online] Iata.org.
Available at: https://www.iata.org/about/worldwide/asia_pacific/Pages/Asia-Pacific-20-Year-
Forecast.aspx.
Relaxnews (2010). Revealed: the world’s best inflight experiences. The Independent. [online] 19
Sep. Available at: https://www.independent.co.uk/travel/news-and-advice/revealed-the-worlds-
best-inflight-experiences-2084808.html [Accessed 21 Aug. 2019].
Smith, E. (2019). Qantas faces backlash for blaming tourism sector for flight cuts. ABC News.
[online] 23 Jan. Available at: https://www.abc.net.au/news/2019-01-24/qantas-and-jetstar-axe-
darwin-flights/10744002 [Accessed 21 Aug. 2019].
Wikipedia Contributors (2019a). Boeing 787 Dreamliner. [online] Wikipedia. Available at:
https://en.wikipedia.org/wiki/Boeing_787_Dreamliner.
Wikipedia Contributors (2019b). Qantas. [online] Wikipedia. Available at:
https://en.wikipedia.org/wiki/Qantas.
Zhang, B. (2018). Airline CEO explains why Airbus lost a major order to Boeing. [online] Business
Insider. Available at: https://www.businessinsider.com/hawaiian-airlines-ceo-explains-boeing-
choice-over-airbus-2018-3?IR=T [Accessed 21 Aug. 2019].