Airline

Question:

Your client is a major airline that wants to reduce the amount of money it spends per passenger on food service, ticketing, and baggage handling. What would you advise?

Solution:

Benchmarking is one good starting point for this type of case. You would certainly want to know (or at least be able to estimate) how much other airlines spend on each passenger for food service, ticketing, and baggage handling. Are your client’s costs in each of these areas high or low for the industry?

You would also want to examine “best practices”: which airlines have the lowest costs in each of the three areas of food service, ticketing, and baggage handling? What are they doing right, and how can we emulate it? (Remember that best practices for a particular process may be found outside the airline industry. For example, how do passenger railroads or cruise ships ticket their passengers? Are companies in that industry doing anything particularly well that may apply to the airline business?)

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