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SERVICE MANAGEMENT - CASE STUDY HEY-AIR LTD

management




Babes Bolyai University, Faculty of Economical Sciences and Business Administration, Cluj Napoca





















SERVICE MANAGEMENT

CASE STUDY    HEY-AIR LTD

























Summary




1. General presentation of Hey Air

1.1. Equity and organisational form

1.2 Fitting of the main type of services within the service process matrix

1.3. Classification of the main type of services according to the main service classification criteria

1.4 Identification of the main strategies used by Hey Air and the fitting in the convenient stage of competitiveness.


2. The service company, a basic organizational linkage in service domain

2.1. Identification of the offered services' components

2.2. Innovation policy in the service company

2.3. The degree of technology of the offered services


3. Operation management in services

3.1 Used and proposed models of foreseeing the demand

3.2 Demand and capacity management

3.3 Waiting line management 252e41c


4. The analysis of the service provider's company situation and the elaboration of improvement propositions


















1. General presentation of Hey Air


1.1. Equity and organisational form


The limited company is an organisational form appeared lately in the commercial activity. This organisational form occurred due to the need of satisfying certain requests from the commercial activity. A limited liability company is constituted on trust, though it has few associates, and the social parts are not freely traded. As a consequence of this matter the associates are responsible for the social obligations within the limit of their social part.


Hey Air is a limited liability company, founded in 2004 by 2 persons. It is a small company, as it has only 9 employees: 2 tandem instructors, 2 camera-flyers, 2 packers, an accountant, a secretary and of course, a manager. The owners have chosen this form of organization (LTD) because, first of all the conditions and the initial capital are much smaller than in the case of other forms, and second of all, they created this compnay for their passion for flying, both of them being renown skydivers in Romania, and that is why they wanted all the major decision to be taken by them, not to share the power of decision with other associates.


The capital structure is the way a company finances itself on a long term: common shares, reinvested profit, long term debt etc. The capital structure is not the same as the financial structure of a company which includes also other capital sources as short term debts, accounts payable, dividends, debts to the employees etc. In the case of Hey Air ltd, the owners decided that 65% of the initial capital form would be own sources, meaning their contribution, and 35% would be long term debt. After beginning the activity, in order to enlarge, and developed the company, they decided to transform the profit and to reinvest it into equipment, and quality training for the employees, nowadays in 2008 the company has the following capital structure:


1.2 Fitting of the main type of services within the service process matrix


Parachutes UpHey Air offers services like: tandem jump, aff jump (for persons with flight approval from the Romanian air-club), skydiving school, jumps (for licensed skydivers). Once in a while, usually at an interval of 3 years the company has to renew their licenses for the services they offer: the instructors have to go abroad for an internationally valid test, an inspector comes to survey the activity, and a lot of files have to be put up and sent to the national skydiving federation, showing all the activity in the last period was legal, all the licenses are valid and they are up to date with all the paperwork in all the departments of the company. The national skydiving federation will have to approve these files and submit the company to the international aeronautic federation. Hey Air has renewed their tandem license last year and at the moment they are renewing their licences for the skydiving school, so the most important services they offer at the moment are tandem jumps and individual jumps for licensed skydivers.


As this domain of activity - skydiving- is not so known, I'll explain the following paragraphs what exactly means a tandem jump and an individual jump.


Tandem Jump:

No previous sky diving experience is necessary; all you need to bring is a BIG smile and an attitude for adventure!


Anyone who wants to see what skydiving means can come and try a tandem jump. From this experience you will remain with 1 minute of free falling (almost 3 km), another 5 minutes of flying with the opened parachute, and a video to prove it. But the feeling of such freedom can not be seen in that video, it will be within you forever.


During this jump you will be connected all the time to your instructor. Before you will have a short instruction of 10-15 minutes, you'll be helped to get equipped, enter the plane, admire the flight and the environment while the plane speeds up to 4000m. A door will open, than you and your instructor together with the camera flyer will walk out into a totally new world, the world of freefall. After the tremendous 1 minute fun in free falling you will open the parachute (if you can not, the instructor will open it for you, so no need to worry), than during the 5 next minutes you will learn to fly a parachute Freefall DVDand land it safely (all the times being helped by your instructor). Once at the ground again, you can tell your feelings and experience to all the people present there, while you are helped to take off your equipment, and you receive a CD with your video from the jump. Now it is your choice if you stay for another jump, or if you go home to your friends to tell them how much fun you had, and convince them next time to come with you.


Jump for licensed skydivers:

This service is specially designed for the ones who have a national or international skydiving license. Those skydivers have 2 options to jump: for free, during the Romania's air club jump sessions (when they jump from 1200m or 2200 m) or they go to drop zones for fun and jumps from 4000m, where they pay for the jump.


Hey Air offers full jump services, including equipment, parachute packing, camera flyer to go with you during the jump. What you have to do.book up your flight, go to the drop zone, receive your parachute and equipment, get on the plane, jump, have a lot of fun, open your parachute and come to the landing spot, where others await for you to hear your new experience. Than you get out of your equipment, take your CD with the video and decide what to do next. These jumps are official and can be put into your flight notebook, the free fall being added to others in order for you to complete the criteria for the next phase in your achievements in skydiving.


In order to demonstrate that management problems are common across service industries, Robert Schmenner proposed the "service process matrix". In this matrix he classified services according to two dimensions: the vertical dimension measures the degree of labour intensity, defined as the ratio between the labour cost and capital cost; meanwhile, the horizontal dimension, measures the degree of customer interaction and customization, a marketing variable that describes the ability of the customer to affect personally the nature of the service being delivered.



Degree of service customisation

low

 

Degree of labor intensity

  low high

A

B

high

 
C

D




Now considering the service process matrix, the tandem jump can be considered as a type C service as the degree of customization is low, because the tandem jump at its base the same for each client, the variable factors could not be controlled by the company ( the weather, the clouds, wind, direction of the launching). The degree of labor intensity is high, as all the time the client will have near him an instructor, who will put on the equipment, will present a short course and will exercise with the client moments from the jump, will go at 4000 m with him and then jump, being connected to the client, will fly the parachute and safely land it, and after that will take off the equipment and deposit it safely for packing. So the tandem jump is considered as being a mass service type, as it has a low degree of customization, but a high degree of labor intensity.

Mean while the jump for licensed skydivers is a type A service, as the company offers the same thing to all the clients (they choose what to do in the air) and also there is not a high degree of labor intensity as only a camera flyer goes up and films the jump if the client required this. This type of service is likely to be compared to a service factory, as neither a high degree of customization, nor a high degree of labor intensity is required.


.3. Classification of the main type of services according to the main service classification criteria


Now that we've seen the position of the company's services within the service process matrix, we will try to find their place in the main classification criteria.

There are 5 major classification criteria proposed by Christopher Lovelock which provide us with an appreciation of possible strategic dimensions that transcend industry boundaries. These are:


a) Nature of the service act:



According to this the service act can be considered across two dimensions: who or what is the direct recipient of the service, and the tangible nature of the service. From another point of view, this classification raises questions about the traditional way services were provided before. Now we will ask ourselves: does the customer need to be present physically throughout the service, or is it necessary his presence only to initiate and terminate the transaction, or is presence isn't required at all.



Direct recipient of the service

Nature of the service

 

tangible

  people things

A

B

intangible

 
C

D



The tandem jump and the jump for licensed skydivers are type C activities, they are services directed at people's mind, as both have as a recipient the client (he will perform the jump) and also they are intangible, giving only a supreme feeling, entertaining the customer. Some may consider though that they can be perceived as tangible services, as the actual body of the client is flying and than jumping, but no ordinary person would like to through his body from a perfectly safe plane at 4000m, at a speed that reaches and sometimes exceeds 200km/h in free falling. Everybody does it for the feeling, for entertaining, that is why we consider it as an intangible service.



b) Relationship with customers:

In some cases service firms build long term relationships with their customers, offering discounts, good fares and better conditions for the ones who have a membership, in the case in which customers conduct their transactions directly with the service provider, whereas manufacturers have been isolated from the eventual end user by a distribution channel consisting of some combinations of distributors, wholesalers, retailers. This criteria contrasts the nature of the customer's membership with the nature of the service delivery.



Type of relation between service provider and client

Nature of services delivered

 

continuous

  membership no formal relation

A

B

discrete

 
C

D




Between the client and Hey Air, there is no formal relation, as anyone can come and jump in tandem, and as the service is performed in a discrete way (no one can jump continuously) the tandem jump is a type D service. In order to be able to perform a jump for licensed skydivers, you have to be member into a skydiving club, and also in the records of Hey Air, with your license in order to perform the jump. Indirectly there is a membership relation between the skydiver and Hey Air, and that is why the jump for licensed skydivers is a type C service.



c) Customization and judgment

Services are created as they are consumed, having most of the times the customer as a participant, this is an opportunity to tailor a service to the needs of the customer. This criteria shows that customization proceeds along two dimensions: either the character of the service permits customization, or the service personnel have the discretion to modify the service.



Extent to which customer contact personnel exercise judgment in meeting individual customer needs.


 


High Low

High

 
A

B

Low

 
C

D





In this case the tandem jump is a type B activity, because the tandem instructor, representing the company's personnel is doing the work, and has to take into consideration all the occurring variables during the jump. He has to control all the time the free falling, to calm down the customer, to stop any inappropriate or chaotic movement, to pilot correctly the parachute in order to land it in the designated place, take into consideration the wind, the weather conditions, and most of all, take care to land safely. So all the time he is intensively exercising his judgment in order to meet properly the customer's needs. The tandem jump's characteristics are not so easily to be customized. Usually the person who contracts such a jump has never done skydiving, or only a little, so one wouldn't know what to expect from it, and what features to add to it. We ca consider that the tandem jump the same for everybody, theoretically, because practically it depends of numerous external factors, out of the reach of the customer or of the company.


The individual jump is a type D service, because the personnel being in direct contact with the customer does not have to exercise such amount of judgment as in the case of the tandem jump. Mostly at this type of service the customer does all the work, as he wishes. The company is offering the equipment, the flight to 4000m and the landing place. That is why this service has also a low degree of customization.



d) Nature of demand and supply:

Time perishability of service capacity creates a challenge for service managers because these managers lack the option of producing an storing inventory for future sale.



Peak demand is satisfied without delay

  wide narrow

A

B

Peak demand regularly exceeds capacity



 
C

D





Both services are a type B activity, first off all because when a person feels the need to jump, calls the company for a reservation, comes to the drop zone and gets ready for the jump because in the next minutes he or she will perform the jump. This activity is a seasonal one.In winter there is no activity, considering that at the ground there are 0 celsius degrees, at 4000m, subtracting 6.5 degrees per 1000m (the altitude gradient), we will obtain a temperature of -26 celsius degrees, a temperature really dangerous for skydiving. So the optimum period for skydiving is late spring, summer and early autumn. Also during a week's time there are not so many clients, as most of them work, and in weekends everyone is free and able to come for a skydiving jump. That is mostly why the company usually holds its activity during weekends. Having this fluctuation over a year and over a week time, the fluctuations are not so wide. The curve of demand looks the same from week to week during the top period and also the same compared from a year to another. Even so the number of clients is increasing, because more and more people hear about this type of service and wants to try it. For this feature the company has a strategy of meeting the demand which will be discussed in the next pages.



e) Method of service delivery

This method of service delivery has both a geographical component and a level-of-customer-interaction component.



Nature of interaction between customer and service organization


  Availability of service outlets

Customer travels to provider

  Single site Multiple Sites

A

B

Provider travels to customer

 
C

D





In the case of both services the customer travels to the provider, as the facilities (equipment, plane, instructors, landing point, wind indicators etc) can not be transported to any place. Also there is a single site, in Strejnic near Ploiesti. Occasionally, on demand the company changes the site to another location. For example this summer the company conducted their activity on Ghimbav drop zone near Brasov, though to the reparations to the landing route in Strejnic. Also on demand they move to other drop zones in the country, if there is a formed group of minimum 30 tandem jumps and 10 individual jumps. But doesn't matter where the plane is and the service is held, they are only in a single site at a time. So both services are type A services.



Identification of the main strategies used by Hey Air and the fitting in the convenient stage of competitiveness


At this moment in Romania there are 2 private companies that perform skydiving services, but another 2 drop zones are about to be opened, one in Bucharest/Clinceni and one in Cluj-Napoca. So in the future the competition will be getting tougher an tougher, as a conclusion Hey Air is thinking also for the future when creating their competitive strategies.


Hey Air uses mainly the differentiation strategy to create more competitive services for the market. Although it hasn't got serious competition on the internal market, it competes directly with the skydiving companies abroad, trying to attract foreign skydivers from abroad in order to come and surf our sky, but also they try to offer the Romanian skydivers the best skydiving services in order to keep them loyal to the company.


In order to differentiate their service from other similar services they use different methods. One of them would be making the intangible tangible. When other drop zones do not offer filming or photography services, or they offer them for an extra price, Hey Air offers, especially for the tandem jump, a CD with the video of your jump. In that way everyone can have a true proof of their jump, and a living memory of 1 minute of free falling. For an extra price (not much) you can choose to have also photos from the jump. You receive this CD before you leave the drop zone.



They also use to customize the standard product. In order to do so they have build a wooden foyer, where you can buy and consume a juice, an ice-cream, a fresh fruit, an energizing drink, a bar of chocolate or other things, all of this while you have a wonderful view towards the sky, the place of launching of the jump, and the place of landing. Also there is a screen where you can see movies with free fall from tandem jumps, school jumps, and expert jumps, with acrobatic moves, stars etc. So a person who comes to the drop zone in Strejnic while sitting and waiting for their turn, they can refresh themselves and increase their enthusiasm regarding movies and in parallel real demonstrations.


Lack of information about the purchase of a service creates a sense of risk taking for many customers. That is why Hey Air has a phone number always available for questions, reassurances, and extra information about anything the client is interested in. There is always a nice person available to solve any doubt a client has, and to explain special matters as the way a jump goes. Also if the person comes directly to the drop zone in Strejnic, there is a person available, always capable of reducing the perceived risk of the client.


Hey Air gives enormous attention to the personnel training. All the instructors are trained in the best drop zones abroad, and have a vast experience, mainly helped by Hey Air. The company invests a lot in trainings for the employees in order that these people can give their best to the clients. Also Hey Air select the best skydivers from the Romanian Air club and trains them, offers them free jumps, and courses in order to prepare them and evaluate them later for a job in the team (camera-flyer, packer, or in time, even aff instructor or tandem instructor).


Maybe the method that Hey Air considers the most important is controlling quality. They control the quality at many levels in the company, in order for the service to be impeccable. The quality of the jumps can be seen and improved by watching the videos of the jumps. There can be observed even the slightest mistake so the personnel can work towards correcting that mistake. Equipment.the most important part in this service, as it offers the integrity of the client as well as of that of the personnel. The parachutes are the finest of their class, with safe opening, mainly school parachutes which can endure a lot of piloting mistakes from the user. The company though has specialized parachutes: tandem parachutes, school parachutes, speed parachutes(for performers). After each jump, before the packing they are closely inspected and checked out for defects or problems. The packing is made by attested packers, with a lot of experience, and an extra point here is that they also jump with parachutes packed by them, so they are indeed reliable. The plane they use is also the best plane in eastern Europe used for sky diving. It gets to 4000 m quickly (12minutes) and silently, compared to the traditional AN-2 the most frequently used plane in skydiving, which gets to 3000m in 45 minutes, and unusually is not used for jumps from 4000m as it is hard to pilot it to that height.


2. The service company, a basic organizational linkage in service domain


2.1. Identification of the offered services' components


There are 5 identified categories of elements within a service package, and these are:

a)      The supporting facility: is represented by all physical resources that have to be in place before a service is performed. In the case of Hey Air, this is Strejnic drop zone, the building, the plane route, the landing point etc.

b)      The facilitating goods: The goods bought by the customer or the good that she or he has: this should be the parachute, the equipment, glasses, and altimeter etc., but also the plane.

c)      Information: is exchanged between the buyer and provider. In our case it consists in the courses and training the customer receives before the jump, and also    the information that he receives from the others, which will help to improve their results in skydiving.

d)      The explicit service: the benefit from these services is felt immediately after the service is performed. Here we can consider the jump, which offers adrenaline, exaltation. Also an explicit service is the flight, the transportation to 4000m, and also the equipment hiring, which gives safety and comfort.

e)      The implicit services: the benefits are not observed immediately. In our case after a jump the person will go home feeling more relaxed, disconnected from the common life. Also one will fill more confident in their forces, and more powerful. A jump offers a lot of confidence implicitly.

If it were to decompose the services into component elements, stept that are to be concluded in order for the service to be complete, these steps would look like this:

-for the tandem jump:

Book-up your flight (by telephone, by e-mail, or on-line)

Arrival at the drop zone + reception + general information

Skydive instructions for the jump

Getting equipped

Getting on the plane + Flight

Jump +landing

Taking off the equipment + receiving the CD with the jump


-for the individual jump:

1. Book-up your flight

2. Checking of the license and other official documents

3. Receiving the equipment, and putting it on

4. Getting on the plane + Flight

6. Jump + landing

7. taking off the equipment and receiving the CD with the video.



. Innovation policy in the service company




Innovation doesn't mean only creating something new, but also improving the old service, adding more features and value to it. That is why we take into consideration two types of innovation: radical innovation (creation of a new product/service) and incremental innovation (changing a previous product/service).


Being a company offering skydiving services it is hard to produce radical innovations, mostly because it is a small company, but also because the skydiving domain is not one in which major innovations can occur. There are certain services that cover all the possibilities of action, and the drop zones can adopt any of these features.

Hey Air uses mostly the incremental innovations, focusing on service line extension, being itself a company that is expanding its activity.They are working now in diversifying the services offered by introducing new courses, such as coach jump, a jump in which the student is thought by an instructor certain movements and figures to do while free falling, and after the theoretical course they both go to 4000m where the instructor will show practically how the figures are done, the student will copy and will be corrected by the instructor. All the session is filmed in order to see where the student is mistaking and for the instructor to be able to explain and to correct the mistakes made by the student. Another course they have worked to introduce is the AFF course (accelerated free falling). Their instructors have just returned from Lillo, Spain, where they successfully graduated the AFF instructor course. In the AFF instructor course the student has little skydiving experience and with the help of two instructors he will learn how to keep his body stable during a free fall from 4000 m. For the future they want to introduce canopy formation jumps, where the skydivers with their parachutes opened form certain figures in the sky; also they want to build a landing spot for swooping. Essentially, swoopers start out with a regular sky-dive, but go a bit faster than they would ordinarily. The result is somewhat spectacular, and needs to be timed just right. The point of swooping, after all, is not just to parachute down from a plane and make a good landing. Instead, you want to swoop over the ground gracefully. Often, this is done over a lake or other body of water. For this reason, the sport of swooping is also sometimes called pond swooping. When pond swooping, the point is to attempt to drag one or both feet in the water for as long as is possible without landing entirely. However, in places that do not have large bodies of water, this is not the way that swooping is done. Instead, people attempt to swoop over the land. In some places, skydivers swoop over corn fields, and drag their feet in the corn, instead of in water. The two things that most people who are into swooping try for is a higher speed when they are near the ground, and going further in their swoops. However, one thing that all people who swoop have in common is a lot of experience skydiving. Therefore, if you would like to get into swooping, you should start with regular skydiving first. That way, you'll learn all of the important techniques that you need to know. If you are already an experienced skydiver, then you should think about swooping for a challenge. Also what they have already done, but only with highly experienced skydivers are jumps with free falling relative work. During these jumps you go with a group of people with about the same experience as you have (over 500 jumps) and make formations, head down, sit fly and other free falling tricks all together in the air. There are a lot more courses and programs that they want to implement, but it will take time, because first of all they have to have clients and not only 10 or 20 in order to perform a proper business.


Another innovation strategy is service improvement. It consists in changes in features of services that are currently being offered. They offer now free filming for the first tandem jump and the first AFF jump, they offer glasses and altimeters for each jump. Now they want to invest into skydiving suits for customers. Also they improve their services by having better trained instructors, that is why they take good care of the employees and send them to all important and new courses abroad. They improve their service as well as by investing in high quality equipment, with a credible warranty.


The degree of technology of the offered services

When talking about the reservations, the book-up procedure, there is no doubt that the company uses technology in this process. This is a technology mediated service encounter, because the connection between the client and the company is made through telephone or through a computer (internet). Here below we present the scheme of this type of using the technology in services.


   


It is also obvious that the camera flyer uses professional cameras and after the actual part of filming, there is need of a computer to give a final form for the video, and to write the CD. So this part of the service will be a technology assisted service encounter.




If we consider the flight to 4000m, than it is a technology facilitated service encounter, because both the server and the customer use technology, but meanwhile they interact.





The other components of the services offered by Hey Air (tandem jump and jump for licensed skydivers) are technology free service encounter, meaning that there is a connection only between server and customer, but no technology is involved.


Also Hey Air uses the internet as technology in their services. They use the internet as a channel to sell their service, more to advertise it, their main advertising method being the internet. Also they use the internet as a process to order the service, through their book-up your flight on-line service. Most of the information related to their activity, they offer on-line. Also they use the internet to communicate with their members. They keep in touch through forums and other channels, where they answer all the questions and announce all the events and promotions.



3. Operation management in services


3.1 Used and proposed models of foreseeing the demand


When talking about forecasting the demand we enter an extremely complex domain. This is due most of all to the highly seasonality of the demand. Not only the demand fluctuates depending on the season, most clients are during April and October, in December, January and February there is no activity; but also the demand varies within the week. That is why Hey Air decided to have its activity only in weekends, because that is when the demand reaches its maximum, during the week the activity not being profitable.


Having all of these in sight the most used method for forecasting demand is the historical one. Historical analogy assumes that the introduction and growth pattern of a new service will mimic the pattern of a similar concept for which data are available. So having the experience of the past years, and closely observing other foreign companies in this domain, Hey Air can forecast a suitable demand curve for the future. But there are many more parameters to be taken into consideration.


As they are extremely busy during the summer, most of the employees having 2 jobs ( a job during the week and at Hey Air in the weekends) they did not orient too much towards forecasting demand, most of all because the reservations system is functioning really well and they have time to prepare for anything that occurs. Although, considering that they are a developing company, and the competition in Romania is not so high now, but it is going to be quite a big one in 2-3 years, I'd suggest that they should orient more towards forecasting demand. The manager should compute weekly the forcasted demand for the next period. In order to do this I'd suggest them to use time series model, more specifically, the exponential smoothing with trend and seasonal adjustments. The time series models are applicable for making short term forecasts when the values of observations occur in an identifiable pattern over time. The exponential smoothing with trend and seasonal adjustment is the most accurate method of forecasting, and really useful in our situation, where the demand is really dynamic. We can include both trend and seasonal adjustments in exponential smoothing by weighting a base smoothed value with trend and seasonal indices to forecast the following period. All the data are introduced in EXCEL, and with the aid of the specific formulas of the method the forecasted values for the next periods will be found. This method is relatively easy and straightforward way to make a short term forecast. It takes into consideration all the past data in the smoothing process, but more weight is assigned to the recent data and only the most recent data are required to update the forecast. But most important the model is easy to implement on a personal computer using spreadsheet software. Smoothing constants allow us to alter the rate at which the model responds to changes in the underlying pattern in the data.


3.2 Demand and capacity management


For the demand management Hey Air uses an extremely organised booking system. Clients can book up by telephone, by e-mail and also on-line. This eases the accessibility to the company's services. In either of these cases a person, when contacting the company tells his or hers preferences concerning the date of the jump and the exact service/number of jumps that he or she wants to perform. In the case that the company is fully occupied for that date, it gives the client the choice of another date. When the company starts to register too many demands for a period than it starts orienting towards increasing capacity. This is what happened recently when the company invested in the formation of another tandem instructor and 3 AFF instructors, and also hiered an extra packer and an extra camera flyer. But these innovations also attract more clients. Now the personnel is well trained and they have the possibility to sustain activity not only with one air plane but with two. They are preparing now to invest in a new air plane which will increase greatly the capacity offered by the company. Also by buying a new airplane, each weekend one air plane could stay at their permanent residence in Strejnic, and the other can go on other drop zones where it is requested. In order for an airplane to go to other drop zones a contract of a demand of 30 tandem jumps shell be signed between the certain drop zone and Hey Air. Having these for certain it is profitable for the company to also change location. Also by having 2 airplanes, the clients can also rely on the presence of one airplane at Strejnic drop zone.


3.3 Waiting line management 252e41c


First of all, by investing in a good plane, Hey Air reduced considerably the waiting time, and the time necessary for performing a service. While a common plane reaches 4000m in over 45 minutes, their SMG in 12 minutes is at 4000m. Also by using 2 tandem instructors they take advantage of each flight to carry more than one person for tandem jump. Also they have 3 camera flyers which are also packers. By giving multiple functions for the same person, not only they reduced the costs, but also they reduced the time, because the camera flyers can organize themselves to cover quickly and efficiently the video-managing part and also the packing part. Hey Air wishes to hire an extra tandem instructor to take more advantage of the space in the airplane, and to use it more for the tandem jumps as they are more profitable.    Another method for reducing waiting time is the booking service. You book up your flight so that when you come to the drop zone you are the next in line for the jump. The administrative personnel is there to help reduce the waiting time, by giving useful information, giving and after the jump taking the equipment from the client, writing the CD with the video, everything that could ease the work of their colleagues. Also they have a method, not necessarily to reduce the waiting time, but to transform it into something useful: the foyer where one can have a drink and watch videos or real demonstrations.


As they have a great reservation system, they rarely encounter waiting line problems. On the other hand what happens frequently is the fact that the clients arrive much earlier than the established hour and leave when all the activity ends. They usually do this because they want to see others how go along, and what to enter better the atmosphere. This is why they have built in Strejnic the bar close to the landing spot. It is basically a foyer, where the clients can cool down while watching others flying heir parachutes and landing safely, or they can watch free fall videos on the plasma from the foyer, or just sit for a chat all of these while enjoying a fresh drink, a coffee, a fruit or an ice-cream. By this method Hey Air socializes with its clients and exercises such a good waiting line management 252e41c that clients don't even think that they are actually waiting.



4. The analysis of the service provider's company situation and the elaboration of improvement propositions


Hey Air is a company acting on a market with relative low competition, but which is going to expand in the next years. It is a company which is developing fast, and it invests a lot of its profits in new equipment and trainings for the personnel and improvements to the facility. 2 years ago it has formed and adopted a development project and strategy. This project is made for 5 years in which they will have an increase in qualified personnel bay 75%, an increase in quality equipment of 50%, a new plane, and a modern facility with a guest house with rooms to rent also. Until now they increased the qualified personnel by 40%, and the new equipment by 35%, they started working at the guest house, renovating the old facility. Now they are working on an investment plan to buy a new plane. Considering their position on the market, they are the best company in Romania having 55 % of the market, Regional Air, Tuzla has 35%, while Romania's Air club has 10 %. Romania's Air club belongs to the state but they offer jumps and static line courses on contract. In the future, having in mind that the market will be expanding they want to maintain their position.


What I suggest is a stronger market campaign, more advertising. Until now they didn't put a lot of accent on advertising. People heard of them from friends or from their web site. They had a few advertising campaigns at aviation meetings. I'd suggest television advertising within tv shows, news, and advertising spots. Also banners in the big cities around Ploiesti: Bucharest, Brasov, Buzau, Pitesti etc. is a suitable idea. Advertising campaigns within fares, their presence at each aviation meeting will be profitable in the near future and also on long term.


Another suggestion is a better monitorisation of the past and present clients to see how permanent clients form, spotting them and offering incentives and price reduction for their loyalty.


The monitoring of clients is also important to develop a better forecasting of the demand. Hey Air should definitely focus on demand forecasting, us I proposed in the previous chapter they should use the exponential smoothing with trend and seasonal adjustment. It is a quite easy to use method, of course in EXCEL. By having a more accurate demand forecast they can create a better investment plan because they see when it is needed the increase in capacity, and when it can be postponed.


In my opinion Hey Air is a successful company that due to the unique domain of activity, attracted a lot of clients and also money and became a really profitable business. The owners were not greedy to keep all the profits and reinvested the majority of it in order to improve the services they offer and the company itself. They developed a series of services, they have in plan other ones also, but with baby steps they'll reach their goals. The most important is that they combined job with satisfaction and the management in Hey Air is extremely relaxed and friendly. I'd say it is a company from which one could learn a lot about bringing a new service to our country and also facing oligopoly on a market.











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