Air New Zealand Value Preposition

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 Air New Zealand Value Proposition

Value Proposition: To super change New Zealand’s success socially, economically and

environmentally.

Introduction

Business gurus argue that for the success of any business organization be it small or large, the

entity has to operate with a strong value proposition. Value proposition is an important

organizational facet that enhances customer understanding and engagement (Abwoga, 2020). In

other words, a powerful value proposition always finds a way to make an organization’s

customers to truly comprehend the value of the company’s products and services. Value

proposition is therefore, defined as an easy to comprehend reason why consumers should

purchase a product or service from a certain business entity. Digging deep into matters value

proposition, this paper will give an insight into the value proposition of Air New Zealand.

Key Partners, Suppliers and Motivators for Partnership

Air New Zealand has an extensive branch of partners and suppliers. The main partners of Air

New Zealand include; Air China, United Airline, Singapore Airline and Cathay Airline. The

partnership between Air New Zealand and United Airline is based on the creation of more

connection flights between the United States and New Zealand. Cathay Airline on the other hand

has partnered with Air New Zealand in order to connect flights between New Zealand and

Auckland. Finally, Air New Zealand has created a concrete partnership with Air Cathay in order

to create flight connection between Asia and New Zealand (Dileep & Kurien, 2021).
Further, it is important to note that Air New Zealand does not only base its partnerships on the

basis flight connectivity between states, but for other crucial business importance. For instance,

Air New Zealand is motivated to partner with Air China in order to establish a base for sharing

resources. The company also partners with Singapore, Cathay and United Airlines in order to

extend partner routes and furnish their customers with the ability to earn and redeem rewards for

travelling miles though several reward schemes.

Air New Zealand also has a series of suppliers who are responsible the day-to-day business

operations of the company. These suppliers includes: Villa Maria (Wine), ST Engineering

Aerospace (Airline’s ramps and frontline operations), Ecoware (Compatable packaging and

inflight products), Flight Interior (Soft furnishing), Micheline Australia (Tyre providers) and

Concentrix (Contact Centre Partners).

Key activities that Air New Zealand Require in order to achieve their Value Proposition

Air New Zealand is a key strong hold in the New Zealand’s revenue and development sector.

The institution however, besides striving to flourish the best travel experience to the New

Zealanders, it also has an interest in ensuring environmental conservation (Jones, 2019).

Therefore, in order to achieve its interest in environmental conservation, the airline has to

ascertain that they engage in reducing the amount of carbon footprint and to critically engage in

effective contribution to the country’s climate and environmental conservation.

As an economic back born of New Zealand, Air New Zealand is also engaging actively to

promote tourism in the country. However, in order to achieve its goals of boosting the economic

development of New Zealand through tourism, Air New Zealand has to engage in furnishing

both domestic and foreign tourists with explicit travel experience and accommodations.
However, in this category, Air New Zealand is seen to achieve the best as it has a series of

regional and international lounges that furnishes both domestic and foreign tourists with

exemplary accommodation during their touring periods both locally and abroad. The institution

also possess large aircrafts that provide a state of art travel experience for tourists (Della & Del,

2019).

Air New Zealand wasrated by Skytrax as one of the top ten arlines and alliance of the year

(Nakamura & Senoguchi, 2022). The airline has special routes designed to boost trade and

marketing. Further, it is noted that Air New Zealand is currently the only airline that

circumnavigate the globe. Lastly, Air New Zealand is well structured, balanced and organized.

Air New Zealand has a variety of customer segments ranging from urgent, we are off again, loyal

to loyal, business and budget conscious travellers. For every customer segmentations, there are

specific relationship expectations that the company has to acknowledge (Keen, 2020). These

realationships include:

Urgent travelers and budget conscious travelers – Transactional relationship

Urgent and budget conscious travelers are infrequent arline users who whose needs are

unexpected. This group of customers expect transactional relationship which entails only

transaction based interraction.

Business, loyal to loyal and business travelers - long term relationship

These groups of travelers are frequent airline users who expect deep relationship between them

and the company (Zhang, 2018). In other words they expect constant and efficient

communication at any time that they need to travel.

As at current states, Air New Zealand has integrated the use of long term customer relationship.

Integrating this strategy is not expensive as it only requires a well structured customer care unit

to tackle customer needs as fast as possible

Almost all our customer segments prefer being reached through direct phones calls in order to

achieve efficiency. Besides the normal phone calls, our Air New Zealand also reaches its

customer segments through email texts and sms (Akinyi, 2019). For any clarification, our

customer care team calls the customer to clarify the matter. However, for transaction details, the

company sends automatic messages to confirm tickets and payment details. Air New Zealand is

creating aimed at creating value for a diverse representaion of customers all over the world

(Wanyama, 2018). However, the company mainly serves business people, tourists and persons

with urgent travel needs

Recommendations

In order to effectively achieve substantiality in curtailing carbon footprint, Air New Zealand

should start using sustainable aviation fuel (SAF). SAF is a type of fuel generated from non-

crude oil raw materials such as landfill waste. This type of fuel has the capability to lessen

carbon emission by 85% (Zhang, 2018).

Air New Zealand should adopt long term relationship with all their customer categories. For this

case, the company should guarantee all its customers be it constant and continuous

communication both on and off the flights. This will help boost the bond between the company

and its customers (Belobaba, 2020).

Air New Zealand should establish more accommodations in every region in New Zealand to

furnish sufficient accommodation all their customers, both local and international. By

establishing more state of art accommodation facilities, customers will be satisfied by the level

of quality hospitality that the institution furnishes, hence developing an eager to come back for

more (Wamalwa, 2018).

References

Abwoga, K. (2020). The value proposition. Pricing on Purpose, 5, 143–174.

https://doi.org/10.1002/9781119201366.ch13

Akinyi, N. (2019). Customer points of contact. Airline Operations, 3, 62–73.

https://doi.org/10.4324/9781315566450-6

Belobaba, P. (2020). Fundamentals of Pricing and Revenue Management. The Global Airline
Industry, 4, 73–111. https://doi.org/10.1002/9780470744734.ch4

Della Corte, V., & Del Gaudio, G. (2019). Employeess value creation and value capture. the case
of airline industry. SSRN Electronic Journal, 4. https://doi.org/10.2139/ssrn.2556234

Della Corte, V., & Del Gaudio, G. (2019). Employeess value creation and value capture. the case
of airline industry. SSRN Electronic Journal, 4. https://doi.org/10.2139/ssrn.2556234

Dileep, M. R., & Kurien, A. (2021). Airlines: A key service provider in tourism. Air Transport
and Tourism, 3, 145–168. https://doi.org/10.4324/9781003136927-8

Gittell, J. H., von Nordenflycht, A., Kochan, T. A., McKersie, R., & Bamber, G. J. (2021). Labor
Relations and Human Resource Management in the airline industry. The Global Airline
Industry, 3, 275–311. https://doi.org/10.1002/9780470744734.ch10
Jones, L. (2019). The value proposition. Maximizing Value Propositions to Increase Project
Success Rates, 4, 47–62. https://doi.org/10.1201/b16786-8

Keen, L. (2020). Airline Web Customer Service. Airline e-Commerce, 7, 416–492.

https://doi.org/10.4324/9781315660400-14

KÖSE, Y., & AKTAN, C. (2022). Analysis of cost structures and cost control strategies of
airlines: An empirical study on a hypothetical airline company. Journal of Aviation, 3.
https://doi.org/10.30518/jav.1024489

Nakamura, Y., & Senoguchi, A. (2022). Modeling of aircraft routes under severe weather
conditions. AIAA SCITECH 2022 Forum, 4. https://doi.org/10.2514/6.2022-0434

Ouma, A. (2019). Characteristics of the airline industry and alliances. Managing Strategic
Airline Alliances, 5, 11–44. https://doi.org/10.4324/9781315249858-7

Perrings, C. (2021). Environmental conservation and environmental change. Conservation, 5, 1–

23. https://doi.org/10.1093/oso/9780190613600.003.0001

Wamalwa, C. (2018). Partnership agreements. Airline Network Planning and Scheduling, 5,

149–157. https://doi.org/10.1002/9781119275909.ch10

Wanyama, D. (2018). Market, product, and customer. Airline Operations, 4, 18–30.

https://doi.org/10.4324/9781315566450-3

Zhang, L. (2018). Airline Customer Service measure. PsycTESTS Dataset, 3.

https://doi.org/10.1037/t54087-000
Appendix

Designed for: Designed by:

Business Model Canvas CEO Air New Zealand Student’s Na

Key Partners Key Activities Value Propositions Customer Re

Partners: Air China, Value Proposition: Air New Air New Zealand delivers to Air New Zea

Singapore Airlines, United Zealand’s current value its customers comfortable variety of cus

Airlines and Cathay Pacific proposition is to supercharge fight experience using their ranging from

Key Supplier: Micheline New Zealands success large aircrafts. The instittion off again, loy

Australia, Kiwi Aircraft socially, economically and also furnishes safe and world business and

Interior, Concentrix, Flight environmentally (Abwoga, class accommodation for conscious tra
Interior, Ecoware, JNP 2020). travelers and tourists in their every custom

Aviation, ST Engineering Key Activities Required by state of art regional lounges. segmentation

Aerospace and Villa Maria Air New Zealand’s Value (Della Corte & Del Gaudio, specific relati

(Ouma, 2019). Proposition 2019) expectations

Key Reources from Key In order to superchange the Air New Zealand is doing its company has

Suppliers: environmental facets of the best to ascertain that their (Keen, 2020)

Villa Maria – Wine value proposition is by customers are capable of realationships

ST Engineering Aerospace – minimzation of carbon travelling to various global Urgent trave

Aircraft maintainance footprint and to facilitate an regions with a lot of ease. budget consc

JNP Aviation – Airline’s effective contribution to the At Air New Zealand, all Transactiona

ramp and front house country’s climate and travellers are furnished with a Urgent and b

operations environmental conservation. comfortable and affordable travelers are i

Ecoware: Compatable Air New Zealand is also flight experience. The users who wh

packaging and inflight driven towards achieving institution also provides unexpected. T

products economic contribution worldclass accommodations customers ex

Flight Interior: Soft through tourism and trade to its customers in its transactional

furnishing opportunities (Jones, 2019). upgrades lounges in more which entails

Micheline Australia: Tyre than twenty countries. based interrac

provider CHARACTERISTICS: Business, loy

Concentrix: Contact Centre Air New Zealand wasrated business trav

partner by Skytrax as one of the top term relation

Key activities of Air New ten arlines and alliance of the These groups

Zealand partners year (Nakamura & frequent airlin

United Airlines: Helps to Senoguchi, 2022). The airline expect deep r

connect flights betweebn has special routes designed to between them

New Zealand and United boost trade and marketing. company (Zh

States of America. (Dileep & Further, it is noted that Air other words t

Kurien, 2021) New Zealand is currently the constant and

Cathay Pacific: Connects only airline that communicati

flights between Auckland circumnavigate the globe. that they need

and Hong Kong Lastly, Air New Zealand is As at current

Singapore Airline: Connects well structured, balanced and Zealand has i

flights between Asia and organized. use of long t

New Zealand. relationship.

strategy is no

MOTIVATIONS FOR only requires

PARTNERSHIPS: structured cu

Air New Zealand partners to tackle cust

with Air China in order to fast as possib

share resources. (Wamalwa,

2018) Key Resources Channels

Air New Zealand also In order to attain effective Almost all ou

partners with Singapore environmental conservation, segments pre

Airline, Cathay Airline and Air New Zealand needs to reached throu

United Airline in order to obtain Sustainable aviation phones calls i

pick up and extend partner fuel and zero emission achieve effici
routes and furnish the aircrafts. (Perrings, 2021) the normal ph

capability to earn and For the organization to Air New Zea

redeem miles via each achieve tourism prowess, it its customer s

other’s reward schemes. need accommodation places ie through emai

lounges and comfortable (Akinyi, 2019

travel services. clarification,

TYPES OF RESOURCES: care team cal

Human resources: Diversified to clarify the

employee population to However, for

handle a similar diversified details, the co

customer population. (Gittell automatic me

et al., 2021) confirm ticke

Financial resources: Enough details.

money to run every operation

of the company.

Intellectual resources: A

proper brand name and logo to

help in marketing.

Cost Structure Revenue Streams

The most important cost inherent at Air New Zealand’s business model is the Air New Zealands currently c

operating revenue. As at end fiscal year 2020-2021, the operating cost at Air single sector and $249 for two

New Zealand had hit $2.5 billion. (KÖSE & AKTAN, 2022) Most Air New Zealand’s custo
According to several analysis, aircrafts are the most expensive resources at money transfer.

Air New Zealand. The company have massive aircrafts that cost billions of

dollars to purchase hence forming the base of the company’s most expensive TYPES: Fare payments, loun

assets. SFIXED PRICING: List Pric

At Air New Zealand, the most exepensive activity is the purchase and dependent, Volume dependen

naintenance of aircrafts. DYNAMIC PRICING: Nego

Air New Zealand is more value driven. The airline has a value preposition time-Market

aimed at creating the best value for their customers globally and not to just

make profit .

Designed by: The Business Model Foundry (www.businessmodelgeneration.com/canvas). Word implementati

License: CC BY-SA 3.0

 What Key Resources do our Through whi

Value Propositions require? our Customer

Our Distribution Channels? to be reached

Customer Relationships reaching them

Revenue Streams? our Channels

Which ones w

TYPES OF RESOURCES: Which ones a

Physical, Intellectual (brand efficient? Ho

patents, copyrights, data), integrating th

Human, Financial customer rou

Cost Structure Revenue Streams

What are the most important costs inherent in our business model? Which For what value are our custom

Key Resources are most expensive? Which Key Activities are most currently pay? How are they c

expensive? How much does each Revenu

IS YOUR BUSINESS MORE: Cost Driven (leanest cost structure, low price TYPES: Asset sale, Usage fee

value proposition, maximum automation, extensive outsourcing), Value Licensing, Brokerage fees, Ad

Driven (focused on value creation, premium value proposition). FIXED PRICING: List Price,

dependent, Volume dependen

SAMPLE CHARACTERISTICS: Fixed Costs (salaries, rents, utilities), DYNAMIC PRICING: Negot

Variable costs, Economies of scale, Economies of scope time-Market

Designed by: The Business Model Foundry (www.businessmodelgeneration.com/canvas). Word implementati

License: CC BY-SA 3.0

Designed for: Designed by:

Business Model Canvas

Key Partners Key Activities Value Propositions Customer Re

Key Resources Channels

Cost Structure Revenue Streams

Designed by: The Business Model Foundry (www.businessmodelgeneration.com/canvas). Word implementati

License: CC BY-SA 3.0