Reference no: EM133410820
Case Study: Afro Jet is a low-fare airline that operates several routes within the West African market. Ganyo Amegashie, the owner of Afro Jet, founded the airline based on the belief that reduced prices would lead to more people flying. Afro Jet's prices are low, for instance, a return flight from Kumasi to Abuja would cost between GHC2500 and GHC2000. Flights with an airline that provides a full customer service package may cost GHC 3,500 or more.
The organization's main base is at Kumasi airport, from where flights to West African destinations such as Abuja, Lome, Cotonou, Monrovia, Freetown, and Ouagadougou are available. The airline also flies Ghana domestic routes from Kumasi to Tamale, Takoradi, Sunyani, and Ho. Sunyani allows the company to gain access to the lucrative Northern Ghana market and is becoming a growing center of activity for Afro Jet. Flights can now be taken from Sunyani to Freetown, Ouagadougou, and Abidjan.
The airline merely carries passengers to and from single destinations. This allows the airline to eliminate costly ticketing processes as well as intermediaries such as travel agents. The company also operates a paperless office policy and non-ticket flights. Simply by ringing the company's telephone number or using the company's website customers can book a seat directly on their Mobile Money wallet and any other electronic card. In the major rainy season in 2022; 40 percent of bookings for a major promotion in the Daily Graphic newspaper were via the internet. Although confirmation of the booking will be sent if requested, customers merely have to produce identification at the airport and quote the booking reference number to be given a boarding pass for their flight.
Afro Jet flights are 'free seating'. Passengers are not allocated a specific seat when they check in; instead, they are given a boarding card that carries a priority number. The first person to check in gets boarding card No. 1, the next passenger gets boarding card No. 2, and so on. Customers are then asked to board according to the order in which they checked in, occupying whichever seat they wish.
The result is that passengers can board the plane faster and tend to sit down faster than when they have to search for an allocated seat, as is the case in more traditional airline operations. The faster passengers board an aircraft, the quicker the plane can take off and the less time it spends on the tarmac. This results in reduced airport fees. The fact that Afro Jet is not hindered by connections to other flights allows it to operate out of cheaper secondary airports such as Kumasi and Takoradi rather than larger airports such as Kotoka International Airport.
Afro Jet also exploits the lack of competition for time slots at Kumasi and Takoradi to keep the length of time its aircraft is on the tarmac to a minimum. Because of this, Afro Jet's planes are in the air longer, giving them more hours to make money than companies that fly out of bigger, busier airports.
Premium-priced airlines offer business class seats, which take up more room on an aircraft and normally operate with 109 seats on a Boeing 737-300. These airlines also require additional cabin crew in order to provide the level of service business class passengers demand. Afro Jet operates without offering business-class seats, which allows it to create 148 passenger places on a Boeing 737-300. Catering consists of a trolley from which cabin staff will sell drinks and a limited range of snacks to passengers. The only 'freebie' on the flight is a copy of the airline's in-flight magazine, "Kwaku the Traveller," which is printed on recycled paper. Cabin crew members dress in navy blue polo shirts and black jeans and have a more relaxed attitude than traditional airlines. They appear to be as concerned about safety as other airlines' employees.
Afro Jet's telephone number is widely promoted. In bright blue, it also dominates the sides of the aircraft, where it has almost become part of the Afro Jet corporate image. The organization's approach to advertising has been described as a "guerrilla" promotional approach, distinguished by attacks on the airline establishment and a series of PR stunts. Press and magazine advertising is widespread. Sales promotion activity has included joint promotions in national Ghanaian newspapers such as The Times and The Daily Graphic. The airline has also been the focus of a documentary series on GTV and UTV.
The owner, Ganyo Amegashie, has been featured in many business articles in the press, particularly for his high profile campaign against the launch by Ghana Airways of its own low-cost airline operation called 'Yaa Asantewaa'. Afro Jet has also started targeting companies that wish to keep travel budgets under control. Afro Jet emphasizes that they do not have a loyalty program where business customers can accumulate points and use them to get free flights. The suggestion is that although executives may like this bonus, the executive's company could be saving hundreds of Ghana Cedis per trip by sending their staff on Afro Jet flights.
Low cost, fast airline operations are becoming more attractive in the Ghanaian aviation industry. Recently, "Fly Home," offering a similar business model to that of Afro Jet, has been launched by the GCTU Business School Tourism Department.
Questions:
1. As a student of strategic marketing, identify and justify the key strengths of Afro Jet in the Ghanaian aviation industry based on the case study.
2. What are the potential threats to Afro Jet's position in the Ghanaian aviation market?
3. From the case study, it is obvious that Afro Jet competes on a low-cost flight. Using Porter's generic strategy (leadership in total cost), recommend to the management of Afro Jet how to keep operating costs as low as possible.