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Global LeadershipManagement Available Titles Course Mate Series

London City Airport Strategic Management

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London City Airport borders the Royal Docks, six miles east of the City of London, London’s new business center located in the Docklands (Bird & Axon, 2007, p. 5). It is just half a mile from Excel London, the Exhibition and International Convention Centre. London City Airport occupies a distinctive market position.

London City Airport is the only airport in London and a leading UK airport for domestic, European, and business travel. London City Airport has unrivalled transport connections to London’s financial, business, and government districts. London City Airport is a rapidly growing dynamic business designed to serve a niche business market, so that it can reap significant financial rewards for the airlines.

In 2010, some 2.8 million travelers passed through the London City Airport to more than thirty UK and European destinations for business reasons (Committee, 2012). Majority of these passengers travelled outside the continent with the rest travelling locally.

The Airport is one of the five leading international airports serving the London suburbs. The other leading competitors are Heathrow, Gatwick, Stansted, and Lurton.           

The airport’s marketing strategy is to be an airport of choice that addresses the needs of the business traveler. The high demand for international travel justifies the choice of the airport’s marketing strategy. The airport sits next to a large financial center, which has many foreign banks, insurance firms, legal, and supporting services (Committee, 2012).

Over the last 12 months, the London City Airport has faced issues including continued global economic weakness and an increase in competition. As a result, it has implemented the new initiatives aimed at improving the passengers’ experience, while supporting its airline customers in their sales and business development efforts. The airport continues to succeed in growing passenger numbers, in detailed planning for future new aircraft and increased movements, and consistent revenue growth for its shareholders.

The airport’s position has contributed toward its enormous growth, surrounded by a business hub of hotels, recreational facilities, and other industries. Its vision is to be the obvious choice for travelers. The airport has continued to launch flight destinations to open up the new business center, where they were not operating before. Work on queue times, using bespoke facial recognition software, plus increased staffing at peak times has reduced average queues for security to fewer than two minutes.

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London City Airport is a privately owned entity, developed using private capital. Other companies operating at the airport include airlines, handling agents, caterers, and retailers. These companies contribute to the airport’s revenue base.

London City Airport is accessible by public transport to and from London’s extensive and multi-modal transportation network. The means of transport to and from London City Airport are excellent.

London City Airport has employed marketing plan aimed at producing, managing, implementing, monitoring, and reviewing its Travel Plan. This will require utilizing a range of initiatives, measures, and marketing strategies (Plan, 2007). The airport has undertaken them to maximize existing and develop new revenue sources in order to improve staff welfare and general environment. The planned growth of the airport’s facilities and businesses will increase revenue to the airport.

The marketing strategy is to make the airport a more efficient structure, where customers take minimum time to check in with ease avoiding long and stressing queues. This guarantees quality services to all operators and passengers.

The ‘s management has put in place a system aimed at addressing organizational structure, staffing levels, allocation of resources and procedures in response to market demand. The airport keeps gathering information on the ways to address customers’ needs, survive in a competitive market, and maximize its profits. Through increased flight frequencies and better schedules, it will take advantage of more direct flights and using capacity and larger aircrafts. The expanding flight destinations to the key European cities include holidays and honey moons for tourists and business executives.

Think of the 4 P’s: Product, Price, Promotion, and Place.

Product

A product is anything on offer to satisfy a want or a need of the buyer. Products can betangible or intangible. Product should fit the task the target consumer wants.  The product should sell with ease to the customers. It should work, and it should be what the consumer expected to get. When designing a product, the target group should be reasonably large for it to be economical and maximize profit. When designing an airport, it should accommodate airlines with large aircrafts. London City Airport continues to satisfy the wants and needs of its customers. Product differentiation is the platform for attracting customers. London City Airport has shopping both on the Terminal concourse, before Security, and Duty Free shopping in the Departures Area after Security. The airport focus is on: good service, tickets, and shuttles. Success in the product differentiation consistently satisfies the needs of customers (Iowa State University, 2003). Different options for the direct rail connections to the London City Airport provide links and connections with other transport modes stimulating growth in the areas it serves.

Increase in capacity at the London City Airport provides a wide range of opportunities to satisfy customers’ needs. Transport service to and from the airport is available taking the form of trains, coaches, and taxis. Cost competitiveness and aggressive marketing give the airport a competitive advantage. It believes that the outlets will “better meet the needs of the unique passenger profile at London City Airport, which includes an affluent consumer base due to its exceptionally high proportion of frequent business travelers”.

Promotion

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This refers to the creation of awareness of the new products targeting potential customers. Successful promotions address the ways the airport wants to be perceived in the marketplace. Communication tools, such as advertising, public relations, sales promotion, and personal selling, should put the organization’s message in a way that customers would like to hear. It should be appealing to the customers’ emotions. Promotion creates awareness of the existing and new products. Effective promotion leads to the increased demand. Negative emotions should be avoided because they can be destructive for the image of the airport. Promotion can be done through sales support, events, internet (social networking websites), and mass media (television, radio, newspapers, etc.). The main aim of promotion is to make people come together. London City Airport trains its crew and pilots on the ways to serve and make customers taste the difference. The airport makes contracts with catering companies in order to serve quality food to the customers. Young guests enjoy memorable services, e.g. toys, designed play areas on board, video games, and foods. There are unique lounges and chairs for VIP customers at the airport, as well as various shops selling souvenirs, food, and other products. The airport’s online strategy encompasses social media channels, use of brochures, newspaper ads, email, website (including booking engines), mobile sites, programs and applications, and microsites to communicate to the potential customers. Selling proposition is something that London City Airport does better than any of its competitors. The airport has used its ideal geographical location and strong economy in order to sign new bilateral agreements with other competing airports. Modern facilities, equipment, and use of the latest technology have given the airport a good image and reputation among customers and the community. These internal characteristics have enabled the airport to stand out from other competing airports. The airport is easily accessible, making it effectively reached and attractive to its clients. This makes it perform its business successfully in a competitive environment. The airport introduced a range of parking options with the five biggest travel agencies.

Place

Place refers to the geographic area to be covered. It is in the distribution network, through which a producer puts the product in the hands of users; bridging the gap between the producer and consumer, places the product at the disposal of consumers.  This can take the form of direct selling. Companies often position their products on price. Points of sale include online, ebookers.com, Travel agencies, and Airlines’ offices. London City’s unique and distinctive approach provide a spectacular view of the London’s skyline, including Canary Wharf, St. Paul’s Cathedral, the Houses of Parliament, and the Olympic Park, highlighting most of London’s main and historical landmarks. London City Airport’s strategic location gives the airport a competitive advantage.

Several technologies have converged to allow companies in a wide range of industries to treat large number of customers as one. Starting with a fervent dedication to saatisfying the individual needs of each of its thousands of guests, London City Airport employs a system that combines information technology and flexible operations to customize the travel experience. At the heart of the system is a large customer database, which contains information about the clients through observations of the airport’s employees. Each day, the airport staff, from those, at the front desk, to those, at the maintenance and housekeeping, discreetly records the unique habits, likes, and dislikes of each customer on a small portable computer. These data plays a vital role in improving customer service delivery. The airport takes advantage of interactive online technology to let potential clients create the virtual market that best fits their individual needs.

Price

The product should represent good value for money. This does not necessarily mean that it should be the cheapest available. One of the main tenets of the marketing concept is that customers parts with a little more for something that genuinely works well for them. Price setting requires the company to decide on its marketing strategy. Many companies view the market based on demand and costs. Companies choose the price that will maximize profits and return on investment. A company can set low prices to counter competition. Packaging the price includes the price of items. In the next ten years, the airport plans to establish its own travel agencies, so that its tickets prices will become cheaper. Flights can be booked online as well. Clients use query forms to book either single or return flights. Flights must be booked at least 24 hours in advance.

The London City Airport got only one receiving station for both airlines and passenger flights with Check-in based at the ground floor. Private owned taxis are always available to ferry customers in and out of the airport. The airport has two underground railway lines services, namely DLR and Jubilee line with numerous stations. Canning town station is the nearest one to the airport. The numerous airlines operating in the airport inform their client’s flights departure and arrival time. Active ads on, situated at departure and arrival lounges, give account of which flight to expect. Passengers using the airport must check–in at least 2 hours ahead of the scheduled time of departure. This gives way to all necessary security check-ups and details concerning their safety and that of other passengers using the same flight.

All luggage checked in advance ensures that only allowed items, which meet flight regulations, will get on board, reducing delay at the airport. Passengers with certain medical problems carry certain things like Syringes but with enough medical proof. The airport makes no compensation to all seized goods, unless under legal terms.

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The London City Airport has priority pass membership program shared by more than 600 lounges all over the world. The program suits better to the business travelers, who traverse one corner to the other throughout the year. All registered members enjoy 10% annual fee discount.

The airport sits next to the tourist site and recreational facilities, such as Hyde Park, Buckingham Palace, river Thames, and Natural History Museum. This has increased the number of passengers using the airlines. The number of tour operators offers cheap, affordable, and exciting tours, making London a tour destination. Passenger en-route London City Airport to other destinations can enjoy these facilities as well.

The airport has introduced new and unique way to book your airport parking on-line. The airport’s management controls parking using comparative price of other parking bookers across the UK to maintain the lead. Clients can either book short stay car park or main stay car park. Short stay car park is situated next to the terminal building, and the client pays after packing. Main stay car park has to be booked and paid earlier to secure parking space, offered together with accommodation, subject to availability. Parking at airport hotels with parking included became cheaper, as compared to parking alone. The management has come up with a strategy to enroll all booking and extra travel facilities in one site available online. The client accesses all parking prices from the different car parks in one page. This saves the client’s time and assists in finding a suitable car park. Moreover, this app is pocket friendly.

The necessary information of the ways the London City Airport operates is available through brochures and detailed airport’s website online. It is ranked among some of the fastest growing airports in the world with a large number of travelers. Customer services satisfaction makes this airport unique in the way it meets customer needs.

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