Improving Service by Cutting Costs

Airlines are often seeking ways to cut costs. A Canadian airline, Transat, is implementing new changes to their airplanes, which aims to lower overall costs. One of the ways an airline can lower costs is by reducing the weight on airplanes, which ultimately lowers fuel costs. Transat plans to use slimmer seats to reduce weight on planes. “We can’t say it’s more space, but it’s a better experience,” says Joseph Adamo, the vice president of marketing. The seats will be using less cushioning and material, which will make the seating roomier.

Aside from the seat changes, the airline is also adding new entertainment systems, which will replace its outdated systems. They will be adding touch screens so that passengers can easily enjoy movies, books, and games. Transat will also add LED lighting inside their planes that can switch colors. All changes will reduce plane weight by about two tons, which will result in about $300,000 savings annually, per plane.

Transat is hoping to increase profits this year in order to stay competitive. Some of their competitors include Sunwing and WestJest Vacations. Transat had a difficult year during 2012 due to customer discounts significantly reducing their margins.

In 2012, because of financial problems, employees delayed wage increase payments. Staff also recently planned to eliminate one flight attendant on planes in order to increase savings. Additionally, Transat reduced their number of routes, which may be a poor decision considering summer, a popular travel season, is approaching. However, Adamo says Transat is still attractive to consumers because they offer direct flights from many Canadian cities to 28 destinations in various countries. There are no layovers due to their direct flights, which means there is no lost baggage and passengers can get to their destination quicker, according to Adamo.

Eventually, Transat plans to reduce its number of planes from 21 to 16. Transat is taking measures to reduce costs. They are doing this in a way that does not negatively affect passengers’ experience; in fact, it may improve their experience. This strategy seems to be an effective one because they are trying to provide the maximum value for customers.

Transat is making changes to their service in a way that benefits not only the company, but the consumer, as well. After a difficult year in 2012, they must also be seeking a competitive advantage. Transat is bettering their service so that they can stay competitive and keep up with other airlines.

Should Transat be adding new technology even though they have been struggling in the past few years? Should they focus on other ways to significantly cut costs? Will making many changes alter the experience for passengers? What else can Transat do to gain a competitive advantage?


Original article: Transat article