Independence Air Project

emancipation carry was not the superior name of the airline. It was erstwhile known as the Atlantic Coast personal credit linelines. The airline originally operated in collaboration with unite Airlines and Delta Airlines Inc. It was a contract carrier for the two older companies.However, Atlantic Coast decided to operate independently when join attempted to reduce Atlantics fee under the bracing contract. After the first vanishing to Atlanta was fully booked, Independence Air expanded the business into most states of the East Coast. In the wolfram Coast the attach to operated only in a few major cities.I.2. Target Market, Strengths and WeaknessesThe club is a Low Cost Carrier, which means that the target market is from the segment with price oriented perspectives. The company started by expanding the service into the eastern approach of the continent because the managers believed that the locations possess more opportunities for Independence Air (Laura, 2005).However, t he company in any case maintained 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 ground on two core qualities rock bottom f ares and profits marketing services. 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 down 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 many airlines including the former partner, United Airlines, stripped the company from its profits (Downfall, 2006).I.3. Marketing MixI.3.1. merchandise/serviceThe company is a Low Cost Carrier airline, which generally means that the company provided air tour services with the cheapest prices possible. In case of the Independence Air, managers and employees of the company are dedicated to creating a low-fare airline based on these six philosophies1) I am about the customer first2) I am honest-to-goodness3) I am about integrity4) I am about operational excellence5) I am innovative6) I am enthusiastic. The six philosophies establish a core intend of creating the unified image as the official airline of fast, easy and less expensive (Independence Air, 2005)I.3.2. PriceArticles from variant 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 can fly on my budget.In erect to reach such(prenominal) goal, besides providing cheap flights, the airline also simplified their fare structure into four fare types. The purpose is to create an easy to understand fare system and easy to book (Independence Air, 2005).I.3.3. PromotionIn o rder of magnitude to promote quality of its flight services, the company operated based on two philosophies, which is to ensure the consumer believed that 1) they can 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 clothe 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 recorded that the CEO spent significant amount of corporate specie on advertising and community sponsorships. The CEO hired people from various media-related professions to promote the birth of the company. whatever of these people are political consultant Carville and his wife, the comedian Dennis Miller, soccer star Mia Hamm and musician Chuck Berry.I.3.4. PlaceThe company preferred electronic means to pr omote their services rather than traditional means. The most prominent 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 several analyses on what causes the bankruptcy of the low cost carrier. This particular case study is deemed interesting for many scholars because of its peculiarity. Low Cost Carriers are deemed as the emerging of the airline industry.However, the case of independence air revealed the fact that there are opposite factors in the airline business than just price. According to an article by the Boyd Group, people are oft unable to separate between facts and myths in the airline business. Here are several examples Despite the general opinion that the LCC model introduced by the famous Southwest airline is very much profitable, analysts believed that the mode is actually not profitable once the fuel price exceeds $2 per gallon As mentioned previously, many considered that LCC is the future of the airline industry for modern countries. Nevertheless, further analysis revealed that the picture looks worsen as the airline industry goes forward.The most prominent theory is the over-capacity theory. The LCC model has very low margin, which means it requires each airline to have sufficiently large market share in order to remain 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 r even offue. another(prenominal) misperception of the condition in the airline industry is the notion that LCC will always outlast a legacy airline. It as reported that in the second quarter of 2005, Americana and Continental Airlines, two of the largest legacy airlines in the United States declared considerable profit.The fundamentals are revealed, the issue is not only cost, but also revenues. intimately after the September 11th tragedy, customers have regain their trust to the airline industry and some of them pass to their consuming routine of searching for convenience in flying.If the LCC do not enhance its ability in providing higher quality services, some legacy airlines will take away their customers easily. (The Boyd group, 2005)In the particular case of the Independence airline, it is stated that the main cause of their failure is because there are already too many competing airlines offer routes on similar routes and racing to offer passengers with the lowest possible fares.The market system caused prices to go even lower every time a new airline is entering the industry (Nance, 2006 Independence Air, 2006).