Introduction
Air New Zealand is New Zealand’s major airline. From its headquarters in Auckland, it conducts mostly global and local air travel. Air New Zealand became an official member of the Star Alliance in May 1999 (Company Profile, n.d.). It offers passenger and freight air transportation services on transcontinental flights in New Zealand, Australia, the Pacific Ocean, Asia, North America, and Great Britain.
It was the final airline to travel around the globe, with flights from Los Angeles and Hong Kong to London Heathrow (Annual Data Book, 2021). Air New Zealand discontinued Hong Kong–London operations in March 2013 in favor of a codeshare deal with Cathay Pacific. The airline’s primary hub is Auckland Airport, which is situated in Mangere in southern Auckland, New Zealand.
A business model canvas is an essential framework for any company. It was conceived by Alex Osterwalder of Strategyzer to address the three main areas of a business: desirability, viability, and feasibility. According to Sparviero (2019), it aids in perceiving and tackling the crucial sectors of a business. It provides an enterprise-wide perspective while focusing on the most crucial elements.
Sparviero (2019) defines a business model canvas as a framework that displays the logic behind how an organization creates, delivers, and collects value. Analyzing the business model canvas aids decision-making by providing answers to various crucial issues. These include the sources of income, the value supplied, the expenses utilized to produce value, whether the perceived main activities and resources are vital to generating revenue, and whether a change to the canvas may have specific consequences.
This research evaluates Air New Zealand’s present value proposition, tying it to the effects of the COVID-19 pandemic to facilitate comprehension of the business model canvas. Air New Zealand serves New Zealand, Australia, the Pacific Ocean, Asia, North America, and the UK (Baxter, 2020). The report is addressed to the company’s CEO. In addition, opportunities are identified to enhance the company’s value proposition and restore profitability, as discussed herein.
Air New Zealand’s Business Model Canvas
Customer segmentation, value proposition, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, and cost structure are all components of a business model canvas. However, this research will solely analyze Air New Zealand’s value proposition. The remaining elements are highlighted in the table below.
Table 1: Current and New (Highlighted) Business Model Canvas of Air New Zealand
The Value Proposition of Air New Zealand
The value proposition of a corporation refers to the goods and services that provide value for a certain group of customers. It helps illustrate why a certain product or service is essential to the consumer (Mohd Satar et al., 2019). This indicates that the content is created to convert a prospective consumer into a loyal customer.
Air New Zealand seeks to create value for its customers by contributing to an improvement in customer happiness and experience. It gives its customers value through safety, reliability, a comfortable flight experience, world-class customer service, and the Kiwi way.
Safety
Safety is one of Air New Zealand’s top objectives. Moller et al. (2021) define safety as the measures taken by relevant businesses to guarantee that aircraft are free of factors that might cause injuries or losses. Every aircraft must prioritize passenger safety to ensure customer satisfaction and a pleasurable flight experience.
The emergence of the COVID-19 pandemic has also made people more aware of the necessity of health safety measures to avoid the spread of illnesses that are readily transmitted from person to person (Annual Data Book, 2021). Air New Zealand has followed the guidelines and restrictions issued by the government of New Zealand and the Ministry of Health to prevent the virus from spreading (Mhalla, 2020). These include ensuring that travelers and workers servicing them are wearing masks and are properly sanitized.
Checking passengers before boarding the aircraft at all transit points increases safety. This ensures that travelers comply with the established policies and standards. It also helps minimize theft and fraud on airplanes, hence creating value. Therefore, safety is a key issue for consumers to consider in the aviation industry since it enables them to reach their destination without incurring any injuries or property damage. This will help Air New Zealand provide consumers with value.
Reliability
Aircraft dependability is a scenario in which the corporate culture encourages workers to perform a variety of tasks efficiently. Air New Zealand is a reputable company that provides its clients with superior goods and services. According to Air New Zealand (2021), the company is accredited with four stars.
In the aviation sector, a four-star airline is one whose cabin personnel service or goods achieve excellent quality level criteria and suit consumer expectations. The quality of Air New Zealand’s seats, facilities, food and beverages, in-flight entertainment, and hygiene are rated (Annual Data Book, 2021). The services with the highest ratings are the cabin and ground employees (Air New Zealand, 2021). A corporation that monitors the dependability of its operations and aircraft provides clients with better value since they are always sure of receiving aviation goods and services of the highest quality. In such instances, system failures may be avoided, hence averting the unplanned technical grounding of an aircraft.
Comfortable Flight Experience
Air New Zealand places a premium on providing its customers with exceptional goods and services. Customers evaluate their experience based on their interactions with the firm before departure, during flight, and after landing (Moller et al., 2021). They have well-trained and qualified workers who provide employees with the highest quality services. They are courteous and respect their personnel to the extent that they cater to consumers with various demands (Annual Data Book, 2021).
The organization places a premium on providing travelers with goods and services of superior quality (Air New Zealand, n.d.). They have taught their personnel to constantly provide excellent food and drinks, entertainment, and other services that clients may want onboard the aircraft to make trips enjoyable for passengers. The organization intends to improve client experiences, particularly in light of the COVID-19 pandemic. The pandemic caused a worldwide economic shock from which the majority of firms in the aviation sector are attempting to recover, hence boosting competitiveness.
World-Class Service
Air New Zealand delivers international services of the highest quality. It has dramatically expanded its long-term expertise and strives to provide the best services possible. It features a staff that entertains and engages its passengers, making their voyage memorable. According to Air New Zealand’s Annual Data Book (2021), passengers may circumnavigate the world with a single airline. It has secure, pleasant, and private business elite cabins.
Employing the Kiwi Way
The majority of Air New Zealand’s customers are New Zealanders. Recognizing the structure of a company’s clients is essential for creating products and services that meet their requirements (Sparviero, 2019). Air New Zealand is rapidly changing and becoming more Kiwi. This indicates that the firm has tailored its goods and services to the requirements of New Zealanders, and the provided drinks and food are indigenous to New Zealand.
Opportunities to Enhance the Value Proposition
Research and Development (R&D)
It is essential to do research and development to determine what Air New Zealand’s consumers value. Due to the heightened volatility of the global environment, the majority of clients seek services and products that correspond to their present requirements. Globalization, industrialization, and the growth of technology have generated dynamism (Brown et al., 2022).
The advent of the COVID-19 pandemic has informed the majority of airline passengers about alternative methods of travel. The vast majority of individuals relied on the shipping industry to acquire products and services as a result of company closures, travel restrictions, and border sanctions. Therefore, many clients employ shipping businesses to convey items from their sources to their ultimate destination. Therefore, the corporation might investigate strategies to differentiate its transport services from those of competing shipping companies. To attract many clients, it may, for instance, offer significantly cheaper costs than shipping businesses.
Apply the Use of Technology
Particularly in the 21st century and after the COVID-19 pandemic, the development of technology cannot be disregarded. Utilizing modern aviation engine technology, the organization can enhance safety. According to Yusaf et al. (2022), many people are becoming concerned about the environment and comprehending the necessity for sustainable development.
Aircraft contribute to global warming by causing air pollution. Utilizing aviation engine technology will minimize fuel consumption, reducing pollution. Pollution rises with increased gasoline use. Additionally, the firm may use information technology because it is applicable to all firm management systems, including supply chain management and other administrative departments. Clients may also utilize the technology to connect with the personnel, saving the firm time and money.
Differentiation of Products and Services
Differentiating a brand is vital for both domestic and international businesses since it helps them stand out in a crowded market. The emergence of COVID-19 has intensified competition in the aviation sector as firms attempt to recover from the economic downturn (Mhalla, 2020). The crisis was so dire that several businesses were forced to cease operations entirely. Air New Zealand can successfully and efficiently distinguish its goods on the market, allowing it to produce greater customer value and be regarded as a five-star airline (Moller et al., 2021). This would help the company gain a competitive edge over its rivals. Qantas, Jetstar, Virgin Australia, and Singapore Airlines are the major rivals.
Conclusion
Evaluating a company’s business model canvas is crucial because it identifies the firm’s sources of income, the value supplied, and the expenses used to deliver value. The canvas also helps highlight whether the perceived key operations and resources are crucial for generating revenue and if a change to the canvas will have inevitable consequences.
This study presents Air New Zealand Company’s value proposition analysis. It is a New Zealand-based airline corporation. The organization provides value to its consumers by emphasizing safety, dependability, a pleasant flying experience, world-class service, and the New Zealand way. This contributes to the development of value and attracts many clients in New Zealand and overseas.
However, the COVID-19 epidemic has caused many business-related interruptions. Consequently, research and development, the use of technology, and the differentiation of goods and services have the potential to enhance the value proposition and restore profitability to the organization. Research and development are essential for determining what Air New Zealand consumers appreciate about the organization. Utilizing information technology and modern aircraft engine technology may improve technology. Differentiating the items would help them stand out in the marketplace in the face of competition.
Recommendations
- Pay greater attention to clients’ communication requirements and provide a place for them to interact, such as a Facebook group or an Internet forum.
- Create unique content for various social media sites, such as uploading more videos on YouTube that express the company’s principles, making more famous remarks on Twitter, and contacting more prospective consumers via various channels.
- Air New Zealand’s largest expense is labor-related. To decrease expenses and increase revenues, the company should increase its personnel management intelligence and substitute easy, repetitive tasks with robots.
- Currently, the Air New Zealand website is merely a traditional airline infrastructure and does not facilitate social interaction among passengers. This report suggests that within five years, the company should grow its social network and create an online communication community where customers can share information about airlines, travel, and their lives.
- Within ten years, creators advocate implementing all website functionalities on mobile devices, optimizing the searching and booking processes, and digitizing the stages of each encounter to make them as easy, humanized, and customized as feasible.
References
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