Kulula

Introduction Main Aim: South Africas first low fare airline which aims to make travel more affordable to all. Kulula comes from the Zulu word meaning easy It is owned by Comair Ltd which is listed on the Johannesburg Stock !change "JS # which is also a franchise of $ritish %irways& $ritish %irways set them u' as a smart choice low fare carrier& Kulula was established in July ())* and started o'erating in %ugust ())*& +ocus cities , Ca'e -own International .urban International %ir'ort /ort li0abeth %ir'ort 1eorge %ir'ort Lanseria %ir'ort -hey ha2e nine destinations countrywide& /arent com'any Com %ir 3ead 4uarters Kem'ton /ark5 khurhuleni5 1auteng 6 South %frica& Key /eo'le 1idon 7o2ich and ric 8enter "Joint C 9:s# ;ebsite , www&kulula&com In-flight Services 6 6 9ffer food and drinks for 'urchase as 'art of buy on board 'rogramme 3a2e s'ecial offers for loyalty club members&

HIS !"# <arch ()*) June ())= <ay ())= /lane 2anilla Kulula seat sale5 with limited a2ailability Kulula get the S'irit of the Confederations Cup football5 and 'aint their nose6cones of their 'lanes to resemble footballs& +light centre outlets sto' selling Kulula tickets not good remuneration recei2ed&

3eidi $rauer a''ointed e!ecuti2e manager for grou' marketing Kulula reduces free checked luggage from (>kg to ()kg 9ct ())? Kulula increased the fre@uency of their tri's around the country&

%lso launched an online sho' with %ltech %uto'age5 where a client can 'urchase a cell 'hone 'ackage with any network to suite their needs& Se't ())? %ug ())? Aedesigns it:s website se'arating it into Kulula %ir5 Kulula -ra2el and Kulula Card& Launched three new brands holiday 'ackages# Kulula Con "data 'ackages# Jan ())? Kulula wins the South %frica -ourism ())B award for the lowest airfare flights to Ca'e -own and .urban& %ir "flight5 car5 hotel and ta!i# -ra2el "$ook flights onsite and

Strengths

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Internet 2ery efficient "*time also# 4uick and easy ser2ice online system ;ork on first come first ser2e system "So if you do not confirm within (Chrs they lose their booking# Can change your bookings online if not confirmed Lower 'rices offered throughout the world cu' /urchased an additional aircraft for the world cu' Lanseria air'ort in Johannesburg has gi2en Kulula e!clusi2e usage of it:s %ir'ort& Strong brand consistent brand communication <ost 'assenger numbers Aecruiting and maintaining high @uality management and staff Cut ser2ice increase smile <aking safety a 'riority Strong brand that customers trust

$eaknesses 6 6 6 6 6 6 6 6 <ust 'ay to confirm your booking within (Chrs can loose customers Cannot trans'ort 2aluable items e&g& wedding cakes or dresses Cannot cancel flights once you confirm them +ans will be denied chea' airfares from Lanseria if Kulula is fully booked& /ay >)D more to fly from Lanseria and not from 9A -ambo Lanseria %ir'ort is small and there is no assistance a2ailable you ha2e to carry your own luggage& Ser2ice centre not as effecti2e as * time 9n6time 'erformance "<ango on to'# hreats 6 6 6 6 6 9ne time5 <ango and S%% com'etitors 9ne time taking Lanseria to Com'etition Commission o2er the e!clusi2e usage of their %ir'ort to Kulula& Kulula are the leaders in the market for chea'er airfares so their costs for research and de2elo'ment was high and the com'etitors Eust co'y their e!am'le and use their information to market themsel2es& +raud the im'act * -ime intends to launch an airfreight business&

!%%ortunities 6 6 6 6 6 Can im'ro2e their sales by ha2ing e!clusi2e usage at Lanseria Larger 'rofits5 because 'eo'le would not want to tra2el to 9A -ambo International Loyalty 'rogrammes and clubs to 'romote their sales and membershi' !'ansion to credit cards and cell 'hone contracts also attract more clients Aecession can work in their fa2our& Aoutes into %frica&

Marketing Strateg&

Kulula uses +irst Aand $ank for their credit cards and for e2ery 'lane ticket 'urchased on the credit card moolas "'oints# are earned which can be redeemed against the 'urchase of future Kulula flights& Kulula credit card holder:s @ualify for additional free Fkg free baggage& 3a2e an agreement with .isco2ery 3ealth and the 8itality members get u' to >)D sa2ings on Kulula flights&

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Kulula Low6cost airlines Com'etition and demand management Com'etition is fare6based which makes cost 'er seat km 2ital&

%ircraft turn6around times ha2e an influence on aircraft utili0ation& %ircraft ty'e a commonality of ty'e affect maintenance and training costs& Seat configuration which allows more 'assengers to be loaded& 7umber of crew as a direct im'act on labour costs& .irect ticketless sales a2oids administrati2e costs& Ae2enue streams can be e!'loited& Ae2enues emanating from hotel bookings and car hire& Sale of on6board goods and ser2ices as well as charges loading baggage in the hold& 3a2ing only hand baggage& Checking in at the air'ort rather than on the web&

<anage demand, <anaging fre@uency +light timings effect demand /ress and tele2ision and internet ad2ertising can be used to manage demand along with 'ress releases and information 'ro2ided by e6mail to website subscribers and fre@uent flyer 'rogrammes "/itfield5 ())?,G#&

/I-+I L.5 .& & ())?& Some insight into com'etition between low6cost airlines& Research in Transportation Economics, (C,F6*C& %2ailable, Science direct&

'usiness travelers In a study by +ourie and Lubbe "())G,*)*# the following conclusions could be made& -he three most im'ortant ser2ice factors for business tra2elers in South %frica5 are seat comfort5 the scheduleHfre@uency of tri's and the 'rice of air tickets& ;hile the methods of 'ayment re@uired are regarded as relati2ely unim'ortant by all tra2elers& -he study has also shown that in future small and medium com'anies would be more likely to use low6cost airlines& +9IAI 5 C& J LI$$ 5 $& ())G& .eterminants of selection of full ser2ice airlines and low6cost carriers % note on business tra2elers in South %frica& Journal of Air Transport Management, *(,=?6*)(& %2ailable, Science direct&

(roduct features of low cost carriers "9:Connell J ;illiams5 ())F,(G)# $rand, +ares, .istribution, Check6in, %ir'orts, Connections, Class segmentation, In6flight, %ircraft utili0ation, one brand, low fare sim'lified fare structure 9nline and direct booking ticketless <ostly secondary /oint6to6'oint 9ne class "high density# /ay for amenities 8ery high

-urn6around time, /roduct, %ncillary re2enue, %ircraft, Seating, Customer Ser2ice, 9'erational acti2ities,

(F minutes turn6around 9ne 'roduct, low fare %d2ertising5 on6board sales Single ty'e, commonality Small 'itch5 no assignment 1enerally Inder'erforms +ocus on core "flying#

Low cost carriers attract a high number of young 'eo'le with the older 'as6 sengers tending to 'refer incumbent carriers which offer additional airline 'roducts not offered by low cost airlines& ())F,(G>5(GC#& Low cost airlines carry more 'assengers who tra2el as a grou' than do incumbent airlines "9:Connell5

Ayanair strengthened a 'erce'tion of e!'ecting low fares from the airliner and that the airline is economically strong by gi2ing away free seats when a mile6 stone was reached5 for e!am'le they ga2e away GG ))) free seats in <ay ())> when its com'etitor easyJet announced half yearly losses of K GG million5 B) ))) on *( June to celebrate that it had carried B) ))) more 'as6 sengers in <ay than its com'etitors and it celebrated its ?)th million 'assen6 ger by gi2ing away ?)) ))) free seats "9:Connell5 ())F,(GB#&

9:C977 LL5 J&+& J ;ILLI%<S5 1& ())F& /assengers: 'erce'tions of low6 cost airlines and full ser2ice carriers, % case study in2ol2ing Ayanair5 %er Lingus and <alaysia %irlines& Journal of Air transport Management, >**,(F=6 (B(& %2ailable, Science direct&

he (roduct and Marketing -he airline 'roduct is more than the sim'le a2ailability of a seat for tra2eling on a 'articular route5 though this is the core benefit& -he 'roduct is not a 'hysical item5 but a constellation of ser2ices matching5 to a greater or lesser e!tent5 the consumers: re@uirements& -his include factors of safety5 comfort and con2enience5 with the latter co2ering the fre@uency of de'artures5 ser2ices including ticketing and baggage handling5 baggage allowance5 etc& -he 'roduct conce't can be further e!tended by associated ser2ices such as car rental5 hotel reser2ations5 e!cursions5 etc& % sur2ey of fre@uent business tra2elers re'orted that four out of fi2e were concerned with seat si0e5 while no other comfort or ser2ice factor rated a mention by more than one out of fi2e ".ri2er5 ())*,*(B#&

.AI8 A5 J&C& ())*& %irline marketing in regulatory conte!t& Marketing Intelligence and Planning, *="(#,*(F6*>F& %2ailable, merald&

+re@uent flyer 'rograms were de2elo'ed to increase the switching cost of their customers "Ahoades J ;agues'ack5 ())F,>CC#&

A39%. S5 .&L& J ;%1I S/%CK5 $& ())F& Strategic im'erati2es and the 'ursuit of @uality in the IS airline industry& Managing Service ualit!, *F"C#,>CC6>FG& %2ailable, merald& )om%laints 9n the hello'eter6website the following number of remarks by 'assengers were made in the last >GF days,

*ood Mango *G

'ad *C*

"es%onded to b& airline C "(5FD#

+time Kulula

CB BC

*GB >B?

()) "=>5FD# >(* "B*5)D#

Com'laints should ha2e a ser2ice reco2ery 'lan which should include the following, -raining em'loyees to resol2e customer issues& m'owering them to do so& Aecogni0ing success stories& Communicating best 'ractices " edes J .urand5 *==?,B)#&

It is clear that Kulula lags behind *time in managing their customer relationshi's&

CCL S5 1& J .IA%7.5 /& *==?& Com'laining customers5 ser2ice reco2ery and continuous im'ro2ement& Managing Service ualit!, ?"*#,G?6B*&

%llowing tickets to be sold at local con2enience stores5 will allow the customer to 'urchase them in familiar surroundings& South %frica with its low internet usage& -his would cut o2erheads of call centres "%non5 ())C,G#& -his could be 'ut to good use in

%7975 ())C& Singa'ore %irlines: winning formula, Cutting the cost of being the best& Strategic "irection, ()"=#,C6B& %2ailable, merald&

)om%onents of airline service ,ualit& %ccording to -santoulis and /almer "())?,>G#5 Chen states that two im'ortant bases on which buyers e2aluate com'eting airline offerings5 are schedule and 'rice& -here are howe2er5 secondary im'ortant as'ects which might be considered& -hese are as'ects like safety5 comfort of the seats5 in6flights

amenities5 attitude of the flight and ground crew5 financial stability5 on6time 'erformance5 assurance that bags arri2e with the 'assengers5 the 'ercei2ed likelihood of being bum'ed from a flight and fre@uent flyer 'rograms&

-S%7-9ILIS5 <& J /%L< A5 %& ())?& 4uality con2ergence in airline co6 brand alliances& Managing Service ualit!, *?"*#,>C6GC& %2ailable, merald&

Ke& factors for low cost airlines /rice is the single most im'ortant 'roduct feature in the low cost airline busi6 ness model& -he key @ualitati2e factors a''ear to be,

+ocus on the core 'roduct "air trans'ortation# without costly ser2ice offerings such as air'ort lounges& Lower cost structure through the use of chea'er air'orts5 online booking and uniform fleet& % lower and more fle!ible 'rice structure& 3igher 'roducti2ity through faster turn6around times and better use of its workforce "+louris and ;alker5 ())B,>*#&

+L9IAIS5 -& J ;%LK A5 -& ())B& +inancial com'arisons across different business models in the Canadian %irline industry& Journal of Air Transportation, *("*#,(F6F(& %2ailable, $usiness Source /remier&

-eliver the customer e.%erience *& liminate actions that don:t match the brand 'romise Kulula has 'roduced and deli2ered their 'romise air tra2el for ordinary 'eo'le from staff uniform "Eeans and takkies# to the a''roach to customers "friendly5 effi6cient and low key#& -heir actions are highly defined& -he brands in the flight maga0ine will not contain dry5 analytical5 editorial content& %ll actions that do not match the brand

'romise5 ha2e been eliminated& Kulula customers are assured5 at all times and across all contact 'oints5 of a consistant brand e!'erience&
2. Aeinforce actions that match the 'romise take things that work and

make them better5 or more 2isible& Kulula:s acti2e use of humor 're take6off worked well and has been carried through all communica6 tion mediums "e2en on the outside of their 'lanes#& >& %dd new5 high le2erage actions that match the brand 'romise& C& Aeco2er from off6'romise actions when there is a mistake5 reco2ery is the key& %ct swiftly and concertedly5 always according to the brand 'romise "S'ark5 ())F#&

S/%AK5 J& ())F& -he art of marrying brand 'romise and deli2ery& htt',HHwww&bi0community&comH/ress9fficeH/ressAelease&as'!L iMFG)JaiM?(*C& .ate of access, F <ar& ()*)&