Answered: define the strategic choice of Pegas…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Pegas airlines started its operations in Turkey by the mid-2000s. Pegas operates under the below statements. The internet is used, 95% of all seats are sold online. Pegas fly its aircrafts intensively, with swift turnaround times each time airplanes land. Ticket-less travel. Passengers receive booking details via an email rather than paper. No free lunch. No free catering No pre-assigned seats No interline connections and cargo services Pegas flies to main destination airports throughout Europe, but gains efficiencies compared to traditional carriers with rapid turnaround times, and progressive landing charge agreements with airports. Pegas does not operate a hub system, passengers have to check in and offload their luggage at each stage. This means that aircraft are not held up whilst luggage is transferred between flights. A focus on the Airbus A319 aircraft, and the retirement of ‘old generation’ Boeing 737 aircraft, meant ‘a young fleet of modern aircraft secured at very competitive rates’ benefiting maintenance costs. A persistent focus on reducing ground handling costs. In the face of rising fuel costs, hedging on future buying of fuel. In addition to all the factors above the reports stated that Pegas’ customer proposition is defined by “low cost with care and convenience. . . . We fly to main European destinations from convenient local airports and provide friendly onboard service. People are a key point of difference at Pegas and are integral to our success. This allows us to attract the widest range of customers to use our services – both business and leisure.” Questions Please analyze and define the strategic choice of Pegas airlines? Please define the cons and pros of the Pegas’s strategy? What are the key success factors of Pegas’ stategy? How easy would it be for other airlines to imitate Pegas? On what bases could other airlines compete with Pegas?

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