Objective
This dissertation aims to investigate, research, and analyze the effects of transforming cost centers into profit centers through marketing departments serving as in-house agencies in the aviation sector. In particular, the study will concentrate on how this change affects airlines’ overall financial performance in the post-COVID-19 period. The results of this research will offer valuable insights for airlines and other related sectors.
Proposal Brief
Research Purpose
The current economic climate, specifically the COVID-19 pandemic, has significantly influenced the airline industry. Due to a decline in travel demand and revenue, it has become essential for airlines to discover new ways to earn income and save costs (Santos et al., 2021). Therefore, this dissertation investigates the possibility of creating internal agencies to turn airlines from cost centers into profit centers.
The dissertation will examine how the airline industry promotes travel by creating high-quality commercials and collaborating with the Ministry of Tourism of Saudi Arabia. The Saudi Arabian government has established its ambitious target to host 100 million tourists by 2030 (Yousif Mohamed Musa, 2021). The assessment will consider the financial advantages of such collaborations, such as how fees paid by the Ministry for creating advertisements might transform airlines and increase revenues.
Research Objectives
Effective Strategies for Airlines to Increase Profitability
Among the dissertation’s main objectives is to uncover and assess the most effective tactics that airlines might use to save expenses and boost profits. Marketing, cost-cutting, and governmental sponsorship are three crucial tactics that will be thoroughly studied. Firstly, marketing will be key in turning costs into profit centers. The internal marketing divisions of airlines can provide high commercials and promotions to drive revenue growth (Chen et al., 2020). These adverts can be distributed to other businesses, such as government agencies or tourism boards, who can then participate by branding the campaign with their logo. How this strategy would contribute to the airline’s profitability will be examined.
Role of Cost Reduction in Enhancing Airline Operations
Secondly, cost reduction is another crucial tactic that will be assessed in the dissertation. By streamlining their operations and improving their procedures, airlines may cut expenses. In particular, this can be accomplished through implementing new technologies and using already available resources (Askah & Thomas, 2022). As airlines can increase their overall financial performance and generate more money to invest in other parts of the business by cutting costs, it is essential to analyze this strategy to understand its viability.
Government Program Sponsorship as a Marketing Strategy for Airlines
Thirdly, the study will examine the sponsorship of government programs as a marketing tactic. Governments worldwide are frequently motivated to market their nations as tourism destinations. Airlines can offer to support these initiatives and supply the necessary materials, such as marketing and promotions, to increase tourism in their region (Scheelhaase et al., 2022). In exchange, the government might provide the airline funding, converting it from a cost center to a profit center. This underlines the strategic value of governmental sponsorships in the airline industry.
Methods and Outcomes
The effect of these strategies on airlines’ overall financial performance will be examined using qualitative and quantitative techniques. The study’s findings will provide valuable insights into how well these strategies perform and how this transformation might affect airlines’ financial performance. Additionally, the research will offer suggestions for airlines and similar industries looking for fresh revenue streams and cost-cutting measures in the post-COVID-19 environment.
References
Askah, E., & Thomas, O. O. (2022). Financial Supply Chain Management Practices and Operational Performance in the Low-Cost Airline Firms in Kenya. Journal of Service Science and Management, 15(03), 350–361. Web.
Chen, Q., Huang, R., Pak, K. Y., & Hou, B. (2020). Internal marketing, employee satisfaction and cultural congruence of Gulf airlines. Tourism Review, 76(6), 1214–1227. Web.
Santos, L. J., Oliveira, A. V., & Aldrighi, D. M. (2021). Testing the differentiated impact of the COVID-19 pandemic on air travel demand considering social inclusion. Journal of Air Transport Management, 94. Web.
Scheelhaase, J., Ennen, D., Frieske, B., Lütjens, K., Maertens, S., & Wozny, F. (2022). How to support the economic recovery of aviation after COVID-19? Transportation Research Procedia, 62, 767–773. Web.
Yousif Mohamed Musa, E. (2021). The impact of tourism in the kingdom of Saudi Arabia on GDP, (2005 – 2017: An analytical approach). Global Journal of Economics and Business, 10(2), 458–462. Web.