Lowest airfares guaranteed slogan

Flight Centre Kenneth Wiltshire

Limited: competing to provide the lowest air fares

ed (FLI) is one of the world's largest IPS, with more than 30 brands and crate and wholesale businesses in ll 5. FLT achieved a record revenue of it before tax of A$256.5m continuing trend that FL] has established over

finally based in Australia, FU's rapidly k now extends throughout Australia. USA. Canada, the UK, South Africa, China, Singapore and the United Arab )n, the company's global travel manage M Travel Solutions, extends to more

ntries through strategic licensing agree- endent local operators. The company n 15,000 people globally, and actively ?rowth. FLT is a successful entrepre- at became established and grew rapidly ble industry and government obstacles. highly competitive environment requiring lon. with a staff- and client-focused odd. However, it constantly faces signif- in an intensely competitive industry

wing capacity for clients to make their :ements online. Having become a major questions arise as to whether Flight lue to operate with one business opera 11 regions and cultures.

Source: Kumar Sriskandan/Alamy Images

double decker buses to take tour groups around Europe. Despite harrowing experiences with bus breakdowns, ;.ani.; .ffi.i;ldi. i" ";-y c.u-t'i.;, ;h''!;g. o ' working capital and back-breaking hours for the founders /drivers/operators, the tours proved very popular and the number of buses and tours grew. Along this journey the entrepreneurs, who had no experien.ce in the industry, had to engage in improvisation, rule- bending, fudging and originality in marketing with no formal strategy.z However, the lessons learned stood them in good stead when they decided to explore the gap they perceived in discounted air travel and founded Flight Centre in 1981.

This turned out to be a formidable challenge. The practice of flight discounting was virtually unknown in the cosy travel industry in Australia, which was charac- terised by intensive government regulation of airlines which had long-established relations with existing travel agents. The industry was immediately hostile to these new upstarts, and they had to turn first to lesser known

)73 when a few young Australians living e inspiration to begin a travel company ck Tours', using old refitted London

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LIMITED: COMPETING TO PROVIDE THE LOWEST AIR FARES FLIGHT CENTRE LIMITED: COMPETING TO PROVIDE THE LOWEST AIR FARES

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!ms and arranging local partnerships

y monitorsoperof trnvel .paokages Strategy and the business model s around the world, stepping in when When the company decided to float in I ; occurred on a few occasions when was largely based on a desire to facilil ive maQe poor decisions. Described ownership in the organisation in or

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emselves in some tight personal financial fund expansion or acquisitions along the share buy-back scheme was attempted in

nly because the directors felt that the share :n well below the true value of the company of external conditions. Flight Centre has ed with a small Board of Directors four or comprising the original founders for most

iny's history. element of the strategy is the price guar-

3dvertising slogan originally said 'Lowest Air xnteed ' because the company's policy is to ler lower published price for a fare. But this hth objections from regulators and today the

:s the slogan 'Lowest Airfare Guarantee '. This caused plenty of headaches and additional

:times over A$10m the total cost of }r fares submitted by clients. It is made

nous because of the airlines who now offer to the public themselves. However, Flight tuck religiously with this pledge and it is now !nched part of the brand and the culture. iamentals of Flight Centre's strategy are organic growth and in this it has been highly Some buy-outs have occurred and some

)rslfication (e.g. hire of bicycles), but the firmly grounded in the travel business and its

(pansion into corporate and student travel as more up-market luxury products has all been !hind the retail presence is an engine room of

tivity as deals are negotiated with a plethora Most travel agents operate their own whole-

as which arrange deals and contracts with

flight, accommodation and ground travel package opera- tors. and then make these deals available to their own retail agents. In an effort to achieve cost efficiencies through internal competition, Flight Centre introduced a purchaser provider approach whereby their retail stores could opt not to choose to buy from the company's own suppliers if they could do better elsewhere a cost- centre concept which was fiercely resisted at first and caused some morale problems, but has gained accept- ance and introduces healthy intra-company competition. However. more in-house transactions are now happening than ever before. The FCL 'replicable small business model ' contains six elements (see Box I)