Independence Air Project

Independence air was not the original name of the airline. It was formerly know as the Atlantic Coast Airlines. The airline earlier operated in quislingism with United Airlines and Delta Airlines Inc. It was a contract carrier for the two older companies.However, Atlantic Coast decided to operate independently when United attempted to slash Atlantics fee under the mod contract. After the firstborn relief valve to Atlanta was fully set aside, Independence Air expanded the patronage into most states of the East Coast. In the West Coast the fraternity operated merely in a few major(ip) cities.I.2. Target Market, Strengths and WeaknessesThe play along is a Low appeal Carrier, which means that the target market is from the segment with terms oriented perspectives. The company started by expanding the service into the eastern salute of the upright because the managers believed that the locations possess more opportunities for Independence Air (Laura, two hundred5).However, the company also keep existence in the west coast of the continent by providing routes for major airports in the region. The original business model of the company was based on two core qualities rock bottom fargons and internet marketing operate. It was originally a success because most of the 600 daily flights to 37 destinations were fully booked (Laura, 2005).Nevertheless, as the months go by, the number of flights was slashed d throw to only 200 a day (Flyi, 2006 Final Boarding Call, 2006).The strengths of the model mentioned above were no match for the problems within the LCC industry at the time. Increasing fuel cost and continued competition from more airlines including the former partner, United Airlines, stripped the company from its profits (Downfall, 2006).I.3. Marketing MixI.3.1. Product/serviceThe company is a Low Cost Carrier airline, which generally means that the company provided air travel services with the cheapest prices possible. In case of the Independence A ir, managers and employees of the company are dedicated to creating a low-fare airline based on these six philosophies1) I am vindicatory about the customer first2) I am genuine3) I am about integrity4) I am about operational excellence5) I am innovative6) I am enthusiastic. The six philosophies obtain a core purpose of creating the corporate image as the semiofficial airline of fast, easy and less expensive (Independence Air, 2005)I.3.2. PriceArticles from motley writers who wrote about the company stated that it has rock-bottom fares. The company offers one of the cheapest fares in the continent. In terms of price, the company has the philosophy of ensuring customers to feel that I displace fly on my budget.In order to reach such goal, withal providing cheap flights, the airline also simplified their fare structure into quartette fare types. The purpose is to create an easy to understand fare arranging and easy to book (Independence Air, 2005).I.3.3. PromotionIn order to nurture type of its flight services, the company operated based on two philosophies, which is to ensure the consumer believed that 1) they whoremaster fly on their own schedule and 2) they can fly their own way (Independence Air, 2005).In order to support the implementation of these philosophies, the company established hundreds of non-stop flights to 37 destinations. The company also order planes with new croupe designs and new cabin designs the will provide customers with the most convenient flight in the industry of air travel (Independence Air, 2005).It was save that the CEO spent significant amount of corporate money on advertising and community sponsorships. The CEO hired people from various media-related professions to promote the birth of the company. Some of these people are political consultant Carville and his wife, the comic Dennis Miller, soccer star Mia Hamm and musician Chuck Berry.I.3.4. PlaceThe company preferred electronic means to promote their services rath er than traditional means. The most enceinte promotional and the sales channel is the internet, along with an 800 number which makes it easier for people to book flights with the airline.I. Causes of BankruptcyThere are some(prenominal) analyses on what causes the bankruptcy of the low cost carrier. This cross case study is deemed interesting for many scholars because of its peculiarity. Low Cost Carriers are deemed as the future of the airline industry.However, the case of independence air revealed the point that there are other factors in the airline business than just price. According to an article by the Boyd Group, people are often inefficient to separate between facts and myths in the airline business. Here are several examples Despite the popular opinion that the LCC model introduced by the famous sou-west airline is very much utile, analysts believed that the mode is actually not profitable once the fuel price exceeds $2 per gallon As mentioned previously, many conside red that LCC is the future of the airline industry for modern countries. Nevertheless, further analysis revealed that the plastic film looks worsen as the airline industry goes forward.The most prominent supposition is the over-capacity theory. The LCC model has very low margin, which means it requires each airline to pitch sufficiently large market share in order to persist in profitable.Nevertheless, with the appearance of new airlines and new competitors, many predicted that their planes should have bumped into each other, in the sense that they will soon run out of sources of revenue. Another misperception of the terminus in the airline industry is the notion that LCC will always subsist a legacy airline. It as reported that in the second rear of 2005, Americana and Continental Airlines, two of the largest legacy airlines in the United States declared massive profit.The fundamentals are revealed, the issue is not only cost, but also revenues. Well after the September 11t h tragedy, customers have regain their put to the airline industry and some of them return to their consuming routine of curious for convenience in flying.If the LCC do not enhance its ability in providing higher quality services, some legacy airlines will take outside(a) their customers easily. (The Boyd group, 2005)In the particular case of the Independence airline, it is stated that the main cause of their bereavement is because there are already too many competing airlines offering routes on similar routes and racing to offer passengers with the lowest possible fares.The market trunk caused prices to go even lower every time a new airline is entering the industry (Nance, 2006 Independence Air, 2006).