Introduction

When two airlines combine, where one airline is a low-cost carrier and other is a full-time airline service provider then this merge perpetually raise significant doubts in the mind of travellers. How much modernisation and novelty of low-cost carrier and panache of well-established airline will survive in the market? Of course, this conflict is the result of the recent merger that took place in between Wombat and Koala Airlines (김화진 & Han, Jin-Soo, 2012).

While considering both aircraft independently, it is obvious that each airlines have their own advantageous points that can be beneficial for travellers, if only the merge runs successfully. On one side, Wombat is entrenched full-service airline known for conveying phenomenal administrations with fleets of modern Skycraft aircraft, while Koala, on the other hand, is a minimal effort transporter working with full capacity to make some innovative improvement in the airline industry. Both airlines companies provide flights to domestic as well as international destinations taking excessive pride with on-time flights. However, being a fresher in the airline industry, Koala is attempting to get more attention by offering odd time flights at a low price. Additionally, Koala has made their booking system online allowing customers to book their departure tickets from the solace of their homes. Although, Wombat is already a leading brand but ageing with each passing time. To solve this issue and maintain their business authority in the industry, both airlines Koala and Wombat have decided to meet up and join the inventive idea of Koala with experience of Wombat (김화진 & Han, Jin-Soo, 2012).

With this merge, it has been confirmed that two greatly unique models will be joined. However the thing here that really matters what modern flyers need today and for what administrations and offices they might want to pay? As per the gathered surveys and feedbacks, it is right to say that usually, travellers select airlines only on the basis of fare along with flying schedule and their loyalty. However, almost every airline choose to provide facilities that are aggressive as well as economical (Yunus, 2013).

The venture would be the best opportunity to get insights from both airlines and figure out what will be the best. It is a fact that even after the merge Wombat and Koala cannot properly adopt each and everything of their businesses as they are rooted in panache and innovation of their businesses (Yunus, 2013).

To enhance the efficiency Koala has invested in the latest technology like online booking and making it easier for flyers to book tickets anytime of the day. Moreover, the airline also provides affordable flights to the individuals who wish to travel in odd hours. The Koala airline is inexperienced and impertinent with astounding Skycraft aircraft that fly to more than 20 international and 35 domestic destinations while Wombat is an old player delivering an excellent in-flight experience with drinks, meals, entertainment, first to board honor, carry-on luggage and Wi-Fi connection in the air (Ting, 2012).

After the Merge of Both Businesses Their Deals States:

  • No determination of staff will take place and whole existing staff will be reserved in the venture. There will be no adjustment in aircraft types, flight destinations or flight schedules. No conflicts will be there at the present scheduling of flights. The sole motive of the merger is to combine join of Koala with the ageing of Wombat (Vilkaite-Vaitone & Papsiene, 2016).
  • The new Wombat-Koala business will work as the low-cost airlines where travellers can take advantage of premium services like drinks, portable luggage, meals, in-flight entertainment and Wi-Fi in the air by giving the required cost (Vilkaite-Vaitone & Papsiene, 2016).
  • After this merge, the official website of the airline will provide online booking services-a sole booking gateway. However, flyer booking indirectly through travel agents, booking operators, booking websites have to pay 15% extra (Vilkaite-Vaitone & Papsiene, 2016).
  • The new organization would be going technical with whole web support service. The new 24*7 customer support has put customer’s stress at ease knowing experts are just one call away (Vilkaite-Vaitone & Papsiene, 2016).

The above report has been drafted to measure the conceivable benefits of the merge of Koala and Wombat and how this merger would be an extraordinary for both parties. The following area of the report will analyse the advantages that will emerge for both airlines as well as passengers, with this venture.

Topmost Advantages of Wombat-Koala Merger

Wombat-Koala has taken a decision to consolidate their businesses to provide new and advanced airline services for present day flyers. The process will be discussed later in the same report but before that let’s discuss about the advantages of this merger.

As previously mentioned both Wombat and Koala provides flights to domestic as well as international destinations, together they both could cover a wider network expanding their flight destinations. Additional through this merge, Wombat will be able to take advantage of Koala’s late night flights with same brand name and low-cost. On another hand, Koala can take learn more about amazing Skycraft aircraft. Apart from this, loyal Koala flyers can enjoy premium services which will not dig a hole through their pockets. After this venture travellers can book tickets from the comfort of their homes something which was earlier not possible for Wombat flyers. Similarly, Koala flyers can take advantage of available in-flight facilities, if they are willing to pay the cost (Seyed Alireza Mosavi, 2012).

With all of the above benefits, the merger of Wombat and Koala looks like a win-win situation for all. However, the new business should include techniques of Information Technology (IT) and Information System (IS) to stay ahead of their competitors (Seyed Alireza Mosavi, 2012).

IT and IS are often considered as similar terms but in reality, both are far from being similar. The IT is a small subset of IS. The Information System (IS) is a very broad term that covers individuals, system and various processes created to collect, organize, store and alter the information in hand. For example; – A pencil and an eraser are two different tools that can be used for various purposes but together they function as a system to collect information. Similarly, no matter whether it is a computer or non-computer system, all are the part of the information system (IS). On the opposite side, Information Technology (IT) is just a small part of Information system (IS) that deals with computer-based IS. (Namukasa, 2013).

As Wombat-Koala has decided to merge their businesses, it is vital for them to include the Information System techniques based on the computer systems i.e. Information Technology (IT). Since Koala already has an online booking framework, its accomplished IT staff would be an excellent advantage of the merger (Namukasa, 2013).

Innovation is the key to success thus, this venture should be noteworthy as modern flyers want ingenious services from booking until they arrive at their chosen destination. Wombat-Koala can consolidate 24*7 client support service which will allow customers to reach travel experts without any time restrictions. Additionally, there must an online ticket booking system with printed tickets which are valid until the airplane terminal registration (Metwally, 2013).

The new and refined IT system of the company would influence the discernment and desire for flyers, Modern day customers are lazier and always look for effortlessly accessible services. Hence, when they find their regular airlines have merged and now providing front line services with modernization: they won’t go anywhere else. Moreover, this merger is going to improve customer’s loyalty toward Wombat –Koala. As said earlier fair matters the most but if provided services are not up to customers check, this could negatively affect the continuous support of flyers (Metwally, 2013).

According to the survey conducted on 800 frequent flyers by Elliott.org (2016), 77% of flyers said fare is the primary factor they focused upon while booking airline tickets. However, other 48% flyers said flight schedule is the most vital factor. 47% said they look for non-stop flights as it saves their time. When it comes to the reputation of the airline, only a few like 15% flyers consider it. Surprisingly class doesn’t matter for many but only for 6% flyers. This clearly represents that in the current scenario, flyers don’t give priority to seat or services they are getting but only look for affordable services. This is the good news for Wombat –Koala which is coming up as a top notch low-cost airline offering premium services on payment (Vilkaite-Vaitone & Papsiene, 2016).

Another advantage of Wombat-Koala merger comes up with the clause in their deal that existing staff of both airlines would be retained. The conditions are beneficial for both airlines as well as flyers travelling with them. The merged staff of both airlines already knows their loyal flyers and how to handle them within the business environment. Wombat staff have experienced to deal with flyers who favor brands while Koala staff is experienced with current IT methods to provide comfortable services to passengers (Kim, 2013).

However, this merge has opened the door to opportunities for both parties but if not addressed properly, these opportunities can challenge the existence of Wombat-Koala in the near future. The problem may start with shifting of Wombat’s data into Koala’s computer. As mentioned earlier, after the merger both airlines must incorporate information system techniques based on the computer-based information. Koala already has an online system and Wombat can transfer its data to their system. The problem is this task is linked with the black history of meltdown that can further derange the function of the company.

According to the senior management of Wombat-Koala, the issue is basically related to the incorporation of Information Technology (IT) which was never a piece of Wombat. E-commerce can help aviation companies to cut down their conveyance costs. It could possibly change the client’s perception or culture and make them realize the upcoming business transformation in the aircraft industry. Despite the many-sided quality of carrier charges absence of interlining, administration backing, interlinking, security and code sharing capacity are some of the major elements which are restraining aircraft business to move along with e-commerce (Ting 2012).

Outsourcing IT needs is essential for the success of a business. For example; upkeep, repair and update can help aircraft companies to reduce the expenses especially in the places where cost is congested and meanwhile can low down the possible future costs. Outsourcing administration can help carrier support their upper hand in the business. Additionally, innovation is helping airline companies to enhance client experience through self-administration. Investing resources into client-centered innovation can assist airlines to bring the automatic machine in basic procedures to support client administration, client touch focuses and scale-down work cost (Ting 2012).

Recommendations

Since both Wombat and Koala got into this merger with their sole aim to be successful in the industry, thus, top management and managers should understand this merger is not only about the unification of Wombat and Koala but is a continuous process of innovation and incorporation of latest technology, facilities and amenities. Being the airline companies serving in the hospitality sector, they should work together to achieve maximum customer satisfaction as it is an important factor to achieve success (Güreş, Arslan, & Yılmaz, 2015).

After analysing the details of both companies, it is suggested for the merged business to improve their IT framework as an airline company it has huge data to store, manage, alter, control and distribute. Unlike traditional information system (IS) where information technology was playing a small role along with other data storing tools: Wombat-Koala should depend on computer-based system where all passenger details, schedules, fair details, flight details, etc. can be stored on computer to easy access (Güreş, Arslan, & Yılmaz, 2015).

Koala was already using an online booking system for a very long time, hence, it won’t be an issue for Wombat to give Koala’s accomplished IT experts a chance to deal with this division However, to move forward in the industry and attract new flyers, Wombat-Koala need to focus on premium services that can be availed by both frequent and regular patrons of both airlines. These services include pick up and drop in limo and premium lounge services. The company can add such services in their loyalty reward program. To make off-season fruitful, the company can double the reward or provide discounts on holiday destinations flights (Gures, Arslan, & Yucel Tun, 2014).

Another method Wombat –Koala can use to attract more passengers is to create and launch a mobile application so passengers can book their flights whenever they want. Now, almost everyone is using smartphones and mobile applications will make services available right on their mobile phones which they can hire in a few clicks. This would increase their business sales by up to 450% or more (Gures, Arslan, & Yucel Tun, 2014).

Utilizing information with the accompanying portable will following tips will help the carrier to bring more clients, enhance user experience and build loyalty.

  • Use adaptable answers to customize advertising endeavours, web booking, brand acknowledgement and hauling choices. Avail web-to-all similar applications, programs and arrangements merged with advanced SEO and compact medium to expand the positioning and presenting to targeted customers (Chen & Hu, 2013).
  • Create an all-around group that allows aircraft companies to address issues faced by clients-anytime, anywhere (Chen & Hu, 2013).
  • Promote versatile in your e-customer data to send special offers to past flier on the basis of their history with airlines and encouraging them to participate in Groupon deals (Chen & Hu, 2013).
  • Become a helping mate to flyers by offering e-cautions, tips, promos, messages, and current flight deals (Chen & Hu, 2013).
  • Use Barter to fill empty seats (Chen & Hu, 2013).

Basically, most of the flyers want to travel in large aircraft with enough gap between seats to stretch their legs with better in-flight services. Hence, Wombat –Koala must pay attention to in-flight services they provide. The company should ensure everything from the food, seats, drinks, to magazines and newspapers offered by them are high in quality to meet passenger’s expectation. The hired in-flight attendants and steward should be well-trained and well-informed to properly look after their duties (Chen & Hu, 2013).

Conclusion

From the above report, it can be concluded that the merger between Wombat and Koala is unquestionably going to strengthen the current position of both airlines in the market. However, to make this merge fruitful for both, it is important for the new business to address and conquer the challenges that come in their way. In the start, the new business has to invest in the employee training as it is an important part of the new business (Barros & Couto, 2013). Confronted with rising labour cost, working cost, worldwide challenges, client needs, the new airline is the best platform for various small enterprises to learn and experiment. On or off the runway, modern clients are pushing carriers to their limits, encouraging them to think more like retailers to come with suitable solutions. Desires around seating, in-flight services, connection with flight staff and requirements are the portion that matters for the clients (Barros & Couto, 2013). Contrast crosswire effect clients more than entertainment and business partitions.  The practices, formation and state of mind to determine what client want- along with market development, empowering travel markets are too part of the social refinement.

Referencing

Barros, C. & Couto, E. (2013). Productivity analysis of European airlines, 2000–2011. Journal Of Air Transport Management, 31, 11-13. http://dx.doi.org/10.1016/j.jairtraman.2012.10.006

Ting, C. (2012). Market Value of the Firm, Market Value of Equity, Return Rate on Capital and the Optimal Capital Structure. International Journal Of Financial Research, 3(4). http://dx.doi.org/10.5430/ijfr.v3n4p1

Chen, P. & Hu, H. (2013). The mediating role of relational benefit between service quality and customer loyalty in airline industry. Total Quality Management & Business Excellence, 24(9-10), 1084-1095. http://dx.doi.org/10.1080/14783363.2012.661130

Gures, N., Arslan, S., & Yucel Tun, S. (2014). Customer Expectation, Satisfaction and Loyalty Relationship in Turkish Airline Industry. IJMS, 6(1). http://dx.doi.org/10.5539/ijms.v6n1p66

Güreş, N., Arslan, S., & Yılmaz, H. (2015). E-SERVICE QUALITY, PASSENGER SATISFACTION AND PASSENGER LOYALTY RELATIONSHIP IN AIRLINE INDUSTRY. Pressacademia, 2(1), 44-44. http://dx.doi.org/10.17261/pressacademia.2015111604

Kim, H. (2013). Service Quality with Satisfaction and Loyalty in the Airline Industry. International Journal Of Tourism Sciences, 13(3), 31-50. http://dx.doi.org/10.1080/15980634.2013.11434679

Metwally, D. (2013). Complaint Handling in the Airline Industry: The Way to Enhance Customer Loyalty. MJSS. http://dx.doi.org/10.5901/mjss.2013.v4n10p299

Namukasa, J. (2013). The influence of airline service quality on passenger satisfaction and loyalty. The TQM Journal, 25(5), 520-532. http://dx.doi.org/10.1108/tqm-11-2012-0092

Seyed Alireza Mosavi,. (2012). The functional relationship between quality, customer satisfaction and loyalty in the airline industry in Iran. Afr. J. Bus. Manage., 6(8). http://dx.doi.org/10.5897/ajbm11.1750

Vilkaite-Vaitone, N. & Papsiene, P. (2016). Influence of Customer Loyalty Program on Organizational Performance: a Case of Airline Industry. Engineering Economics, 27(1). http://dx.doi.org/10.5755/j01.ee.27.1.10267

Yunus, N. (2013). Service Quality towards Customer Loyalty in Malaysia‟s Domestic Low Cost Airline Services. IJEEEE. http://dx.doi.org/10.7763/ijeeee.2013.v3.253

김화진, & Han,Jin-Soo,. (2012). The Effects of Cabin Servicescape on Customer Satisfaction and Loyalty in the Airline Industry. Jounalofkoreaservicemanagementsociety, 13(1), 259-281. http://dx.doi.org/10.15706/jksms.2012.13.1.011

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