Interview Transcript

Our Client Ramco Airline has seen an unusual increase in profitability. Can you find out the reasons behind the same?

Okay. I would like to start by asking a few preliminary questions.

Sure. Go ahead.

Has this unusual increase happened only to our client or to the competitors as well?

This unusual increase in profitability is limited to our client only. You can go ahead and work out the revenue streams for our client

Okay. I would like to segregate the revenue of the client into ticket revenue, cargo services, in-flight catering services, advertisement, and flight entertainment. Do you want me to go on the cost side as well?

No, let us focus on the revenue side only.

So, first I would like to look at ticket revenue. Ticket Revenue = Price of Ticket * No. of Flights * No of Seats * Occupancy Rate

Do you have information on any of these factors?

No. The revenue from selling tickets is constant. Try looking at other factors

How about cargo services if the client has diversified the business in terms of services offered, number of planes & coverage area

No, the services are the same as before.

Great. How about advertisements is there a change in revenue from the same

Actually, it’s the opposite there has been a slight reduction in revenue by advertisement.

What changes have been made in the advertisement services?

Previously we used to have advertisements by a different company in the back seat area. Now it’s replaced by the client’s own in-flight app/website.

Interesting. What services does the client offer in the flight app?

Through this in-flight app passengers can book taxis, and hotels, rent movies and order food on flights, and much more.

Has there been an increase in usage of this service?

Yes, the usage of this app has become 4-fold after placing the advertisement behind the seat.

Interesting. How is the revenue split among different inflight services of Ramco airline

The revenue split is as follows: Taxi Booking- 10%, Hotel Booking-15%, Renting movies: 5%, Ordering Food:30% and inflight shopping: 40%

Inflight shopping is having big share of total revenue. When did Ramco introduce the inflight shopping feature?

We introduced this feature along with our new ad campaign that I mentioned earlier.

So, inflight shopping is the reason behind unusual increase in profitability.

Great. What all recommendation do you want to suggest to sustain the revenue?

The recommendation would be to make the app more engaging by offering various offers, collaborating with other brands to offer there service in the app and constantly pushing the update to make app fluid.

Great, Thank You. We can close the case now.

Case Facts

• Client is an airline company
• Client ha changes its advertisement strategy
• Client had unusual increase in the profitability