Running an airline is one of the most risky ventures in the world and because of this, investors in most cases have to think twice or rather thrice before staking their money in any airline company.
The airline business is not only so risky but also so expensive to maintain that very few individual businessmen can invest in it, except for governments and multinational conglomerates.
Although airlines face innumerable challenges, new entrants in the business are in most cases hard-hit, because it takes them a long time to hit the break-even point and to reach the level of operating sustainably and profitably.
However, Mrs. Monica Rubombora, who has been conducting consultancy in the aviation business for over 15 years, during which she has been consulting for both mature and new airline entrants into the South African market, devised a set of strategies through which a young company like Uganda Airlines can minimise losses, maximise revenue generation and expand business within a shorter period than what the investors had earlier anticipated.
According to Rubombora, all new entrants in the airline business can only survive and thrive if they employ the right strategy, process, people and technology services.
“A new entrant in the business like Uganda Airlines, just like any other airline in Africa, has to focus the following key things; operational efficiency, research, customer service, technology, strategic partnerships and incentives,” Rubombora says.
As an expert in this field, she offers new players on the African aviation scene like Uganda Airlines the following tenets that are key to success in the aviation industry;
Focus on Operational Efficiency
“One of the most important things is operational efficiency. That means running your airline with maximum output and minimum input while still delivering high-quality services to your customers,” Rubombora says, adding; “You want to ensure that all your working processes are tightly managed, optimised, and streamlined to minimise costs and improve profitability.”
The expert contends that one area where operational efficiency is crucial is aircraft utilisation because the airline will want to optimise flight schedules, improve turnaround times, reduce aircraft downtime, and ensure the aircraft spend less time on the ground, so as to reduce costs of service and maintenance.
She also notes that another area of focus is fuel efficiency because fuel is one of the most significant expenses for airlines, hence it’s critical to minimise costs here.
“That means optimising flight paths, implementing fuel-efficient aircraft, and ensuring efficient fuel management. One positive about the newer entrants into the African markets, such as Uganda Airlines, is that they have more fuel-efficient aircraft than mature airlines,” she points out.
She however reveals that there are other focus areas for operational efficiency as well, such as maintenance and engineering; crew management; airport operations; and baggage handling, which are all essential strategies for increasing revenues and reducing costs.
Conduct Market Research
About the importance of research in business, Rubombora says that; “If you’re a new airline entrant in the African market, you know that market research is crucial. But why? Well, for starters, it helps you identify market gaps and unmet customer needs. That way, you can design products and services that meet the unique needs of African customers. And let’s face it – Africa is a unique market with unique needs. An airline like Uganda Airlines might want to make sure they’re meeting the needs of their clients if they want to succeed.”
She goes ahead to point out that market research will also help a new entrant understand the competitive landscape on the continent and learn about competitors’ strengths and weaknesses, which will help the airline identify opportunities and areas of differentiation.
By doing so, an airline Uganda Airlines can easily stand out from the crowd and offer something that competitors do not. So what should you focus on when it comes to market research?
Well, Rubombora says there are a few critical aspects to consider, which include; “First, you want to look at the market size. How big is the market? How fast is it growing? Second, you want to look at target market demographics. Who are your customers? What do they want?
Finally, pricing strategies are essential too. You want to make sure you’re pricing your products and services competitively while still making a profit.”
Offer Competitive Pricing
“For example, if there are seasonal fluctuations or changes in customer preferences, an airline can adjust its pricing strategy accordingly. And let’s not forget about external factors like fuel price changes. Competitive pricing can help you stay competitive even when external factors are working against you,” Rubombora maintains.
So, how do you achieve competitive pricing?
Well, according to the consultant, there are a few innovative pricing strategies that airlines in Africa can use:
This involves adjusting prices based on demand. For example, if there’s high demand for flights during a particular time of year, you can increase your prices accordingly.
This involves offering packages that include multiple services at a discounted price. For example, Uganda Airlines could offer a package that includes a flight, hotel stay, and rental car.
Flexible fare structures
This involves offering different fare classes with different levels of service. For example, you could offer a basic economy fare with no frills and a higher-priced business class fare with more amenities.
This involves offering additional services that customers can purchase separately. For the case of Uganda Airlines, offering seat upgrades, inflight shopping, baggage handling services, or priority boarding can come at an additional fee, which in the long run will result in increased revenue.
In addition to the above, however, Rubombora emphasises that Safety and Security are also key to the success of any airline.
“When it comes to airlines, safety and security are top priorities. But for new airline entrants into the African market, they’re even more critical. That’s because there are strict safety and security regulations that must be followed to maintain high standards,” she says.
“Compliance with these regulations is essential for building customer confidence, protecting the airline’s reputation, mitigating liability, and complying with international standards. All of these factors are essential for the airline’s financial sustainability and long-term success. Fortunately, Uganda Airlines ensures conformity to the requisite international aviation safety and security regulations,” observes.
Rubombora notes that although there are several safety and security protocols that new airline entrants should invest in, African airlines should always be in compliance with safety and security regulations set by the African Civil Aviation Commission (AFCAC), the International Civil Aviation Organization (ICAO), and local regulatory bodies in each country of operation, for Uganda’s case, the Civil Aviation Authority (CAA).
The gist of the matter here is that airlines the world over build customer confidence by investing in safety and security protocols, which in turn ensures securing the airline’s financial sustainability and long-term success.
Therefore, by investing in and complying with safety and security protocols, the airline will build customer confidence and attract more business, because when it comes to airlines, safety and security are non-negotiable.
Invest in Customer Service
Customer care, service and satisfaction are cardinal principles in the airline business and this Rubombora says; “Want to make your new airline stand out in the African market? Invest in customer service! Not only does it help build customer loyalty and encourage repeat business, but it also improves your brand reputation. By prioritising customer satisfaction, you can get positive media coverage and increased brand awareness.”
She adds that doing so will enable the airline to get valuable feedback on customer preferences, behaviours, and trends, which can help a company like Uganda Airlines to customise products and services to meet the unique needs of Ugandan and or African customers.
She explains that there are many ways airlines can offer loyalty incentives to their customers, some of which include:
Free flights or upgrades, priority boarding
bonus miles or points for frequent travellers, among others.
She also emphasises the use of surveys to collect data that can assist the airline in making informed decisions.
“Surveys can be conducted online or in person and can be used to gather specific feedback on issues that you want to focus on. Surveys should preferably be short and engaging to avoid abandonment,” she says, adding; “SMS or Text surveys can be used to send timely surveys that customers can respond to quickly. Interviews can obtain genuine feedback from loyal and repeat customers. Website feedback tools can allow customers to submit feedback directly on your website. Communication channels can be phone, messenger chat, SMS, or email, depending on the customer’s preference.”
According to Rubombora, the best way to get customer feedback fast is by offering several different ways for customers to reveal how they’re feeling, plus using a mix of quantitative and qualitative methods.
It is important therefore for new airline entrants must prioritise providing timely and helpful information, promptly addressing customer complaints, offering loyalty incentives, and listening to the voice of the customer.
Leverage Digital Solutions
Rubombora also maintains that it is crucial for a new entrant like Uganda Airlines to hinge the biggest part of its business on digital operations because the airline business is largely a technology business.
This is because leveraging digital solutions is critical for new airline entrants into the African market to improve the customer experience for example, providing a seamless customer experience, from booking to check-in, boarding, and in-flight services.
This can include digital check-in, mobile boarding passes, onboard entertainment, and onboard Wi-Fi, among others.
Besides the above, however, deploying digital technologies can also help reduce operational costs by automating processes and reducing the need for manual labour, which can include online booking systems, electronic boarding passes, and automated baggage handling.
Technology also helps to improve operational efficiencies, for example, when it taps into real-time data for flight management, predictive maintenance, and demand forecasting.
Another area of interest according to Rubombora, is the deployment of digital technologies to help generate additional revenue streams, including the sale of in-flight products, duty-free items and ancillary services such as seat upgrades and baggage fees.
“For instance, a new entrant like Uganda Airlines can deploy a team of data analytics so as to be able to gain valuable insight into customer preferences, behaviours, passenger feedback, and market trends. It is only by embracing digital solutions that new airlines can position themselves as innovative and customer-focused companies while gaining a competitive edge in the market,” Rubombora advises.
All the above said and done, she lastly advises all new and mature airlines to Build Strategic Partnerships
“Want to succeed in the African market? You’ll need to work hard – but it’s worth it! In fact, over 70% of new and repeat business comes from partnerships. That’s why developing strategic partnerships is essential for new airline entrants into the African market,” she says.
Why? Well, there are several reasons, but Rubombora lists the following for airlines that wish to make an indelible mark on the African skies;
Access to New Markets:
Strategic partnerships can provide new airline entrants access to new markets, enabling them to expand their reach and compete more effectively. This can be achieved through partnerships with other airlines, travel agencies, hotels, and tourism boards.
Increased Brand Awareness:
Strategic partnerships can help new airlines reach new audiences and create more opportunities for customer engagement. This can include co-branding and cross-promotion with other companies in the travel and tourism industry.
Improved Operational Efficiency: Strategic partnerships can help new airlines reduce costs and improve profitability. This can be achieved through code-share agreements, which enable new airline entrants to expand their route network and enhance their service offerings.
Strategic partnerships can provide new airline entrants access to shared resources, including equipment, personnel, and information technology. This can help new entrants like Uganda Airlines reduce costs and improve operational efficiency by acquiring more flight routes.
Strategic partnerships can enhance the customer experience by providing new airline entrants access to a broader range of products and services. This can include partnerships with hotel chains, car rental companies, and other travel-related services.
Diversification of Revenue Streams: Strategic partnerships can diversify revenue streams, providing new airline entrants with additional sources of income. This can include partnerships with loyalty programs and ancillary service providers, such as baggage handlers and catering companies.