Let's solve a

consulting case
problem statement
A leading airline service provider considering
to where could they increase their frequency
and where could they add new routes.
Interviewer: So, your client is a leading airline service
provider. They have done a study as to where they
could increase their frequency and where they could
add new routes. The new policy got approved by their
Board. You must help the client start on a
particularly identified route: Kolkata – Goa – Kolkata.
Interviewee: Sure, so I have to help the client start up
their new route in Kolkata – Goa – Kolkata. Is that
correct?
Interviewer: Yes.
Interviewee: Ok, before I start structuring the case,
can I know about the existing flights on the route
mentioned?
Interviewer: Sure, why not. So, we have an Indigo
flight on this route which is a direct flight.
Interviewee: Ok, great. Can I know more about this
flight, as in how many seater planes there are, what
the timing is, occupancy of the plane?
Interviewer: Sure, it is a 180 – seater plane, and the
route timing is 10:30 am Kolkata to 01:00 pm Goa
and returns at 02:15 pm from Goa, once daily. The
frequency is once a day. The flight runs at 95%
occupancy on average.
Interviewee: Ok, Can I know about our client’s plane
(how many seaters?)
Interviewer: Yes, why not, it is also a 180-seater
plane.
Interviewee: Can I have a few minutes to structure the
case now??
Interviewer: Sure, take your time.
Interviewee: I would like to ask a few more questions.
Why have the other operators not started operating
on this route?
Interviewer: Well, many operators are evaluating this
route.
Interviewee: Ok. So with 95% average occupancy, it
seems to be a great route to run a flight. So our
concern should be to decide at what slot we plan to
run the flight and what frequency we plan to operate.
I want to know more about the cost structure of
operating a flight on a route.
Interviewer: Ok, what about the cost structure?
Interviewee: Tarrif, at the airports, parking charges (if
they are cheaper at Goa, then we park the plane
there or in Kolkata). Is the same plane used for other
routes as well? Do I also need to size the market on
this route?
Interviewer: Ok, ignore these factors for a moment.
And there is sufficient demand on the route so that
market sizing can be ignored, as 95% occupancy on
average is an excellent occupancy.
Interviewee: Ok, how are the slots decided at the
airport for an operator?
Interviewer: Assume that you will be given the slot
you desire, how would you suggest the client operate
on this route?
Interviewee: Ok, so the route is attractive. We have to
decide on the slots at which we operate. We also
need to check what differentiating services we can
offer to poach customers from competitors operating
on the route.
Interviewer: Interesting, what differentiated services
can you offer?
Interviewee: Well, achieve operational efficiency,
allow faster check-in/check-out, increase frequency
for seasonal demand (as Goa has more tourists during
winters and Christmas) and perhaps use data for
personalized services and even provide more luggage
facilities.
Interviewer: Interesting, don’t you think the operators
are already doing it? And on your luggage point, what
kind of travellers go to Goa?
Interviewee: Mostly tourists.
Interviewer: Yes, and what kind of luggage
requirement will they have?
Interviewee: Less light travelling is the norm, so it is
not a feasible suggestion. Can we operate indirect
flights?
Interviewer: Our operator has direct flights on this
route, so the flight is costly.
Interviewee: Interesting! Then we can include indirect
flights on this route, reducing our ticket cost and
increasing occupancy. We can have one-stop flights
with halts at Mumbai and Bengaluru.
Interviewer: Ok, at what slot would you prefer the
client to schedule the flight?
Interviewee: We have a very high average occupancy,
so there is demand on the route. I would operate the
flight simultaneously or around the same time as my
competitor to take advantage of the demand. As our
flight will be with one-stop, we can lower our ticket
prices.
Interviewer: How will the competitor react if the client
lowers the ticket price?
Interviewee: It will also lower the price.
Interviewer: So, is it a good idea?
Interviewee: No, we can operate at the same price as
a competitor. And since our costs could be lower
because of one-stop flights and higher occupancy we
can make higher profits.
Interviewer: Alright, thank you.
 Approach
New Route for
Airline

Existing Costs Slots Differentiated

Flights Services

Airport
Occupancy Tariff Data based

Frequency Airline Costs Operational

Efficiency

Luggage
Facility

Ticket Price
CAREER EDGE

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