Example 2

Feasibility Study for Air Australsia The viability of establishing the inexpensive carrier Air

Australsia to serve the Australasian sector is critically examined in this paper. The research

examines the logistics and supply chain components needed to assist the company’s

endeavor. Various professional managerial techniques and approaches, such as the Balanced

Scorecard, Benchmarking, and PEST evaluation, will be utilized in the assessment. Around

the world, the airline business has been overgrown, with cheap airlines dominating a sizable

piece of the market. However, viability remains a severe challenge, with revenue levels

typically below three percent (Andriakov, 2022). Carriers must regularly implement

significant upgrades that focus on lowering costs to perform more effectively. The intense

character of the contemporary aviation sector and the significance of logistics and supply

chain management for maintaining company stability are both acknowledged by

AirAustralsia. The organization has thus asked for a feasibility evaluation to ascertain

whether it is feasible to establish a distribution network that will promote its commercial

[Link] existing regional distribution network and its ability to sustain the industry,

logistics systems to promote carrier expansion, an assessment ofthe environment to

encourage Corporate Social Responsibility (CSR)processes, and the use of creative thinking

and managerial techniques arethe main areas of research. The research will start by outlining

the Australian airline economy and the projected expansion of the Chinese corporate and

business sectors, pointing to an interest in regional flight travel. The paper will next go into

the project’s objectives and purpose, as well as the research techniques and strategy used to

complete the project. This paper’s ultimate objective is to present a thorough study of the

supply chain and logistics needs that will enable the launch of a budget carrier in the

Australasian industry. The paper will show competence in creating assessments utilizing
various consultant managerial methods and instruments, such as sensory visualization,

analytical thinking, chance certification, and an environmental audit when appropriate.

Problem Identification

A business called Air Australsia intends to launch a budget carrier to serve the Australasian

industry. The organization is looking for consulting help to establish whether creating a

network of vendors that supports the enterprise is feasible. During the past decade, the airline

sector has expanded significantly, with low-cost carriers (LCCs) playing a significant role in

this growth (Sant, 2020). Since marginal profits are often lower than three per cent, attaining

sustainability is still a realistic objective (Pels, 2020). The eternal paradox of this sector is

that although other stakeholders in the supply cord, like terminals, aircraft builders, aircraft

engine producers, tour operators, and service providers, generate handsome revenue, the

corporations that transfer customers need help breaking even. Air Australsia has to

implement significant and continuing enhancements to become a viable, inexpensive carrier.

Saving energy is essential to cutting costs because it typically accounts for 40 to 55 per cent

of an aircraft’s operating expenses (Bogdanov et al., 2021). Developments to the company’s

framework, operations procedures, and production methods can all help cut costs. Notably,

older carriers may employ decades-long, complicated techniques that are much more

expensive than the simplified ones used by LCCs. Australia’s airline sector has an extensive

past, with many airlines flying domestically and internationally. Foreign carriers, broader

airline business and its security, and local and regional carriers comprise the three main

Australian civilian air travel trade segments. More than ninety per cent of travellers to

Australia arrive by air, which is served by international airlines that transport passengers and

cargo to and from locations throughout the globe. Approximately sixteen million travellers

arrive in Australia each year roughly from all across the globe. Although in Australia, most

travellers are transported by air, vessels carry most of the merchandise to different places.
Future growth in China’s corporate and economic sectors suggests an increasing demand for

air travel in the region (Zhang and Graham, 2020). Various topics must be investigated in the

context of every company creation to construct the company’s justification for the enterprise.

A crucial component of the enterprise under consideration is the supply chain and logistics

structure that must be in place to guarantee continued operations. That is especially true given

that the business aims to embrace an economical approach, which exerts additional strain on

the amount it wants to shell out for services and products. The business must take into

account multiple value chain-related factors. Hence it is searching for an advisory service to

do an impartial feasibility evaluation in this domain. The primary concerns which arose out

of the early research are the requirement to comprehend the present regional distribution

network that will help the company and maximize its ability to grow, the up-to-date logistical

system to promote the carrier’s expansion in opposition to rivalry, environmental evaluation

to back CSR processes, and the implementation of dealing with issues and managerial

techniques. Air Australasia is determined to make sure that they conduct a thorough study of

the challenges which will influence what is needed in the supply chain for operating the

company because they are aware of the intense competition in the current aviation market.

Australasian Economical Airline Consultation The viability of creating a budget carrier in the

Australasian region and creating a successful supply network to back up the company’s

operations initiative is, thus, the primary issues that need consulting help in this particular

research. For successful competition against other air carriers in the area, the corporation

must comprehend the regional supply network’s capability and the logistical system’s state.

Additionally, the company must do an environmental evaluation to support CSR initiatives

and employ managerial and problem-solving skills to ensure the supply chain operates

efficiently (Lambrechts et al., 2019). To successfully launch a budget carrier in the

Australasian economy, the consulting should offer an in-depth examination of the problems,
pinpoint feasible remedies, and recommend the most practical and profitable action plan. The

team of consultants should research prospective campaigns for low-cost airlines in the

Australasian area and the primary factors. Given the intense rivalry in the aviation sector, it is

essential to create a distinct identity for the company that sets the low-cost airline apart from

its rivals and attracts its target demographic (Dursun, 2023). The consultants might analyse

the market to determine customer tastes and create an individualized advertising effort that

successfully conveys the business’s distinctive value proposal. That may entail employing

social networking platforms, collaborating with tourism organizations, and using additional

electronic advertising channels to appeal to many people and spread the word about the

recently launched carrier. To reduce threats and harmful effects on the business’s image, the

consultants ought to create a strategy for handling crises (Rapaccini et al., 2020). The

consultancy group can aid the low-cost airline in launching effectively and gaining a firm

footing in the Australasian aviation industry by focusing on these essential components.

Critical Discussion

It is crucial to consider both the existing situation of the international aviation sector and the

unique difficulties that LCCs confront to objectively analyse whether launching a budget

carrier in the Australasian economy is feasible. According to the International Air Transport

Association (IATA), the aviation industry’s profits have doubled over the past ten years, with

LCCs primarily responsible for this development (Kaffash and Khezrimotlagh, 2022).

Nevertheless, carriers’ revenue streams remain slim, especially for companies with stringent

expense restrictions. To address the specific problems mentioned by Air Australasia, an

academic study using data from books and journals can provide informative information on

the state of logistics and supply chain networks in the aviation industry today (Dutta et al.,

2020). By comparing Air Australsia’s logistics and supply chain network to those utilized by

other carriers operating in the area, benchmarking may be used to pinpoint optimal
procedures. The logistics and supply chain network might be evaluated using the balanced

scorecard versus essential parameters, including expenses, sustainability, and effectiveness.

Fuel economy is a significant issue for budget carriers because it covers many operational

costs. A review of fundamental abilities might pinpoint locations where Air Australasia can

create specific skills and competitive edge to help it run better and for less money. The

business’s line of goods could be examined using the BCG matrix to determine sectors it

could put money into or dispose of to increase revenue. The feasibility assessment for a low-

cost carrier that wishes to differentiate itself from competitors by focusing on CSR should

include environmental research as a critical factor (Chonsalasin et al., 2020). A PEST

assessment or environmental inspection might be employed to evaluate the effects of macro-

environmental variables on the aviation sector and spot possibilities and hazards.

Perceptual maps may be employed to determine how customers view Air Australsia’s CSR

initiatives and pinpoint opportunities for improvement. A vital assessment requires careful

use of facts and scholarly literature (Jalil and Hwang, 2019). That entails thoroughly

assessing the calibre and dependability of materials and considering the constraints of any

information or assessment utilized. Different perspectives on belief, possible prejudices in the

research, and possible moral or societal ramifications of the suggested suggestions should all

be considered. The oversight climate is crucial when determining whether launching a budget

carrier in the Australasian industry is feasible. Governments frequently restrict aircraft

activity significantly, affecting costs, routes, and other aspects (Munawar et al., 2021). As a

result, to assess the venture’s viability, a comprehensive review of the legal structure is

required. As partof this investigation, the legal climate in important regions should be

evaluated along with any prospective admission hurdles. Government agencies and other

parties should be consulted to acquire data and perspectives for the feasibility investigation.

When determining the viability of a budget carrier enterprise, a thorough monetary study is
also essential. The predicted income and expense levels should be examined, and significant

economic indicators, including financial viability, break-even evaluation, and return on

investment, should also be assessed. A sensitivity evaluation ought to be carried out to

determine the effects of numerous variables on the carrier’s financial health, including fuel

costs, currency rates, and economic circumstances. A comprehensive economic evaluation

can assist in locating possible hazards and possibilities as well as helping to make choices

regarding investment feasibility. Budget airline firms should consider marketing and

branding to develop a unique selling proposition and differentiate themselves from

competitors. Understanding client needs is possible thanks to market research and client

assessments. Launching a budget carrier in the Australasian region is a difficult task requiring

meticulous research and preparation. The viability of the enterprise can be better understood

through a feasibility examination that tackles the major issues with the logistics and supply

chain structure, the legal framework, economic evaluation, and branding and advertising. A

thorough review and suggestions that can help branch out sustainability choices might be

developed by utilizing various advisory service administration methods and instruments, such

as a balanced scorecard, benchmarking, the BCG matrix, the core competencies analysis,

perceptual mapping, and environmental audit/PEST analysis. To enhance the possibilities for

achievement for the inexpensive aircraft enterprise, efficient execution of scholarly studies

and thorough scrutiny are crucial for ensuring the accuracy and trustworthiness of the

proposals.

Application of Theory

The PEST evaluation, Benchmarking, and Balanced Scorecard will be utilized in this paper to

assess the viability of Air Australsia’s idea to launch a budget carrier in the Australasian

economy. A strategic management tool called the balanced scorecard enables firms to assess

and control their results from four angles: monetary, client, organizational procedure, and
development and improvement. Political, economic, social, and technological (PEST)

evaluation provides a paradigm for identifying and analyzing outside variables that can

impact a company’s success. Benchmarking evaluates and contrasts a company’s activities,

procedures, and standards with its rivals or leading companies in the field. It is a strategic

management tool that aids businesses in locating opportunities to enhance productivity by

adopting standards of excellence. By benchmarking, companies may define achievable

objectives, independently evaluate their actions, and strategize to reach their goals. The

procedure is a constant operation that aids firms in maintaining their competitiveness while

continually enhancing their performance. Benchmarking may be carried out inside, through

assessing productivity among various divisions or departments in the same business, and

internationally, by evaluating productivity with other companies operating in a comparable

field or market.

Balanced Scorecard: The Balanced Scorecard’s economic viewpoint is concerned with the

company’s financial health, encompassing economic viability, increase in sales, and expense

control. The budget-friendly carrier strategy is intended to lower expenses while boosting

earnings for AirAustralsia. By determining the factors that affect costs, like gasoline, staffing,

and facilities, and putting measures to cut expenses, including fuel-saving aircraft and

simplified procedures, the corporation has to assess the initiative’s economic viability. The

main discussion topics are the client’s fulfilment, experience, and devotion. Air Australsia

must determine its target demographics’ demands and interests to build its solutions and

offerings. That entails creating an intuitive webpage, delivering attractive prices, and

supplying top-notch service. The value link, arrangements, and effectiveness at work are the

main areas of attention for the inside approach. Air Australsia must build a solid supply

network to sustain its operations and economical flight strategy. That entails locating the

regional distribution network, supplier network, and possible vendors, as well as arranging
advantageous conditions of service. The capacity of the business to acquire knowledge,

develop new ideas, and advance is the main focus of the education and development

approach. To foster ongoing advancement and creativity, Air Australasia must foster an

atmosphere of learning that includes spending money on staff development and training,

implementing novel innovations, and comparing with current standards in the sector.

PEST Analysis: PEST evaluation provides a structure for identifying and examining outside

variables which can impact a company’s success. Regulations, taxation, and incentives are

some political issues that might impact Air Australsia’s inexpensive airline initiative.

Restrictions and fees that the authorities might enforce, including airport fees and security

requirements, can raise the expense of the business. Nevertheless, the rules may additionally

supply incentives and subsidies to lower operating costs, like tax breaks and fuel assistance.

Industrial expansion, rising prices, and currency fluctuations are some of the monetary factors

that could impact AirAustralsia’s economic airline business. An increase in in-flight needs

may result from the Australasian sector’s growing economy, which may present chances for

Air Australasia.

Nevertheless, factors like the price of gasoline and upkeep for aeroplanes can be impacted by

price increases and currency exchange fluctuations. The affordable flight initiative

undertaken by Air Australsia may be affected by societal concerns such as customer habits,

societal conventions, and changing demographics. To build its products and services

appropriately, Air Australasia must comprehend the social makeup of its intended customer

base, which includes factors like age, financial status, and schooling. Consumer choices and

societal expectations also affect the desire for flights, such as whether people choose

complete versus budget airlines. Facilities, rivalry, and technical improvements are

fundamental variables impacting Air Australia’s economic airline initiative. To increase its

effectiveness in operation, Air Australasia must incorporate novel innovations, including

online reservation systems and environmentally friendly aircraft. Facilities like terminals and

systems for managing air traffic may also affect the expense and efficiency of procedures.

The revenue and market share of Air Australia may be impacted by pressure from various air

carriers, both full-service and affordable. The PEST evaluation and Balanced Scorecard

might be used to assess the viability of Air Australsia’s economic aviation business in the

Australasian region. Air Australasia may properly handle its financial results according to all

four viewpoints of the Balanced Scorecard by executing cheaper strategies, developing

customer-driven solutions, building a reliable supply network, and encouraging a culture of

education. Air Australsia’s low-cost carrier initiative’s foundation is its ability to strike an

equilibrium between internal and external effectiveness.

Benchmarking: A strategic management tool called benchmarking compares the success of a

business with that of its rivals or to conventional industry standards to find areas where it

may develop. By measuring the achievement of a company with that of competitors in the

same business, benchmarking allows firms to assess their achievements and pinpoint places

that need improvements. (Partanen, 2023). It is necessary to analyze and evaluate its

methods, processes, and achievements compared to competitors in theindustry to determine a

company’s weaknesses and strengths. The PEST evaluation and the Balanced Scorecard may

be employed using this tool to assess a company’s general success and pinpoint areas for

development. . Benchmarking allows AirAustralia to compare its results to its rivals in the

Australasian region’s market for low-cost carriers.

AirAustralsia can identify its strengths and opportunities for development by investigating

and contrasting its competitors’ outcomes

Benchmarking may assist AirAustralasia in locating and implementing market standards to

enhance its overall efficiency. For instance, AirAustralia can compare its clientele care

procedures with other budget carriers in the industry. AirAustralasia may find places where it

can raise client happiness by contrasting its policies to those of its rivals, like streamlining the

process for checking in or offering additional flight amenities (Dhamija, 2020).

Benchmarking may be utilized to determine AirAustralsia’s logistics and supply chain

procedures with those used by different carriers to find areas where cost management,

supplier choice, and shipping timeframes can be improved. For companies like AirAustralsia,

benchmarking is a valuable tool for assessing effectiveness, identifying development

opportunities, and adopting standards of excellence to enhance performance.

Conclusion

In summary, AirAustralasia is working to launch an affordable airline that will serve the

Australasian region. To attain this objective, the organizationmust first decide whether it is

feasible to establish a network of suppliers that will promote the commercial effort. The

report emphasized the aviation sector’s difficulties and possibilities, notably the requirement

for stringent cost reductions, increased fuel economy, and structural upgrades. The Balanced

Scorecard, Benchmarking, and PEST evaluation were among the leadership methods and

instruments analyzed in the paper. Utilizing such resources allowed for an in-depth

examination of the subjects that needed investigation to develop the economic rationale for

the endeavor, comprising ways to solve problems and the regional supply network, logistical

facilities, and environmental [Link] research leads to the below

suggestions for AirAustralasia for its economic airline business to be successful:[Link] a

solid supply network management system, aiding business activities while minimizing

[Link] fuel-effective planes to cut back on operating [Link]

innovation to simplify business operations, enhance client retention, and lower [Link]
frequent environmental assessments to verify that CSR activitiesare being carried out.5. Use a

problem-oriented method of instruction to help workers improve their expertise and

[Link] an edge over others by regularly benchmarking with champions in the sector

and identifying efficient ways to boost efficiency in [Link] track success across

business objectives and goals, adopt an integrated [Link] suggestions can help

AirAustralsia improve its efficiency, lower expenses, and keep an edge in the fiercely

competitive aviation market.

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