Porter Airlines
Case: Porter Airlines
Group:
Issues: The issues facing Porter Airlines are whether or not the existing business model will remain valid during ongoing operations. The company needs to plan their expansion strategy and decide on how aggressively it can enter competitive markets.
Analysis:
Porter Airlines competitive position lies in its dominant position at YTZ as it is close to downtown Toronto, and is very attractive and attracts a higher yields ($/RPM – revenue per passenger mile). Billy Bishop’s (airport name) operations are hemmed in by its short runway and a ban on jets—part of a 1981 agreement between the city, the federal government and the Toronto Port Authority designed to protect local residents. Deluce (Porter’s CEO) needs political support for this expansion to take place. With that agreement not being in place then Porters growth predictions are questionable mainly smoke and mirrors.
Offer and operating strategies determine how you will win share and by what advantage. With all things being equal, a superior value (or advantaged) offer, available for the same price as competitors or substitutes, wins market share. Or alternatively an offer of equal value at a lower price will also take share. A lower price offer requires a lower cost (or cost-advantaged) operating strategy to be sustainable over time. In Porter’s case their competitive strategy is to do both. Porter’s primary goal is to establish itself as the short-haul carrier of choice by providing superior customer service and convenient and high-frequency flights to key North American business and leisure destinations. As other airlines are trading off customer comforts for price, Porter is including premium service perks, in all classes of fares. They are able to accomplish this not by stripping the services from customers but by driving costs out of the value chain in other ways including cost advantaged operating strategy choices.
Porter Airlines' expansion strategy raises
Group:
Issues: The issues facing Porter Airlines are whether or not the existing business model will remain valid during ongoing operations. The company needs to plan their expansion strategy and decide on how aggressively it can enter competitive markets.
Analysis:
Porter Airlines competitive position lies in its dominant position at YTZ as it is close to downtown Toronto, and is very attractive and attracts a higher yields ($/RPM – revenue per passenger mile). Billy Bishop’s (airport name) operations are hemmed in by its short runway and a ban on jets—part of a 1981 agreement between the city, the federal government and the Toronto Port Authority designed to protect local residents. Deluce (Porter’s CEO) needs political support for this expansion to take place. With that agreement not being in place then Porters growth predictions are questionable mainly smoke and mirrors.
Offer and operating strategies determine how you will win share and by what advantage. With all things being equal, a superior value (or advantaged) offer, available for the same price as competitors or substitutes, wins market share. Or alternatively an offer of equal value at a lower price will also take share. A lower price offer requires a lower cost (or cost-advantaged) operating strategy to be sustainable over time. In Porter’s case their competitive strategy is to do both. Porter’s primary goal is to establish itself as the short-haul carrier of choice by providing superior customer service and convenient and high-frequency flights to key North American business and leisure destinations. As other airlines are trading off customer comforts for price, Porter is including premium service perks, in all classes of fares. They are able to accomplish this not by stripping the services from customers but by driving costs out of the value chain in other ways including cost advantaged operating strategy choices.
Porter Airlines' expansion strategy raises