Airline Business

Airline Business
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Airline Business
Question 1
Principal ancillary revenues refer to the revenue generated from services or goods that are different or enhance the main services of the main product lines. In airline business, the ancillary revenue has increased significantly and has impacted how airlines operate. The ancillary revenues in airlines include the seat class, extra luggage, extra leg room, and the extra snacks and meals outside the normal meal times offered by the airline. There are several contributions from frequent customers that contribute to the ancillary revenue earned by the company. The airline business is facing many risks, and any economic shock affects how companies operate.
Therefore, ancillary revenue assists the companies to survive the downturns associated with high costs of operation, economic downturns, and pressure to reduce air ticket prices. Through the widening of revenue sources, there is potential of enhancing and stabilizing revenue and hedge against potential losses. While ancillary revenue is important, it has made many companies focus on expanding their revenue streams without considering the best alternatives for the company. This can lead to customer dissatisfaction and long-term revenue losses. When ancillary revenue is used to remove focus on company mission and goals, it leads to poor quality outcomes in the airline business.
Question 2
Many individuals prefer flying in the economy class, which is the main reason why airlines are densifying the economy class. The seats are fitted with basic requirements that allows travelers to move between airports. It is also essential to note ...