a) Purchasing new planes: Newer planes are fuel efficient and needed fewer staffs for maintenance. Fuel price being inelastic in demand, overtime, American airlines will have no choice other than replacing better, efficient ones.…
Johnson, M. E. (2009, May 08). Enhancing Service at Southwest Airlines. Tuck School of Business at Dartmouth,…
Airline industry is the topic I researched in this analysis. Companies in this industry provide scheduled domestic and international passenger transportation, mail and freight transportation. Major US companies include American Airlines, Delta, Southwest, and United Continental, as well as the air operations of express delivery companies such as FedEx and UPS. The industry key survival factors are efficient operations, reliability of services, and safety. The drivers of change are internet economy, globalization, and low cost competition. Based on the key survival factors and drivers of change,…
The airline industry experienced growing revenues throughout the 1990s. At the turn of the new millennium, there was a drastic change to this trend. A major devastation to the airline industry came after the terrorist attacks on September 11, 2001. The industry recorded losses of $7.7 billion for the year and revenues went down 13.5% after a record $93.6 billion in 2000. The industry struggled throughout the following years. Recovery from losses was difficult in those times due to increased security costs, increasing oil prices, a struggling economy, and low ticket fares. In 2008, oil prices reached a record high and the top 10 U.S. carriers lost $4 billion, followed by a $5 billion loss in 2009. Conditions have begun to look better for the industry. There is evidence of improving demand and revenues for the top 10 U.S. carriers in the first half of 2010, and oil prices remain lower than the 2008 record highs. This could be the beginning of more profitable years for the industry.…
AMR Corporation is committed to providing every citizen of the world with the highest quality air travel to the widest selection of destinations possible. AMR will continue to modernize its fleet while maintaining its position as the largest air carrier in the world, with a goal of becoming the most profitable airline. AMR is the airline that treats everyone with equal care and respect, which is reflected in the way each AMR employee is respected. AMR recognizes that its employees are the key to the airlines success and invests in the futures and lives of its employees. By investing in tomorrow’s technologies and by following a strict adherence towards environmental regulations, AMR demonstrates its commitment to the world environment.…
In an airline industry, companies had been suffered with low returns, bankruptcies and ever-fluctuating demand. Air France has been preventing the situation by developed strategies such as a progressive operating lease, short- or medium term lease of substantial part of fleets to reduce capacity and cost. Since 2006, the traffic of air travel has been growing rapidly, which created a competitive landscape in the airline industry and also the emergence of e-commerce as a direct to consumer sales. Air France took those opportunities by providing online services on direct website, but after a while aggregators and metasearchers who offer beyond services appeared, which make the direct website had difficulty to compete. Media Contact, hired by Air France, has been developing strategy to optimize performance on Search Engine Marketing campaign to increase net revenue gained through online channel and return on investment spending, as well as efficiency of driving visitors to site and convert them to consumers through the conversion funnel at the minimum cost.…
With preparation for the strategic plan, research will be performed on American Airlines in regards to their overall organizational structure, the company’s vision, mission and values. The importance of a company’s “vision statement is sometimes developed to express the aspirations of the executive leadership; vision statement presents the firm’s strategic intent that focuses the energies and resources of the company on achieving a desirable future” (Pearce, 2013, p. 34). American Airlines is a company that has been in business for 87 years, research will be conducted to get a complete insight to the…
Answer: as shown in the case Continental senior management decided to invest in enterprise data warehouse that all employees could use for quick access to key information about the business and its customers.…
Bibliography: Samadi, Nima. (September 2010). IBISWorld Industry Report 48111b - Domestic Airlines in the US. Comprehensive report outlining the airline industry along with market research.…
Since day one, Southwest Airlines has been able to maintain a winning strategy. Starting with just three aircrafts in the state of Texas, Southwest implemented a low cost, low fare, no frills strategy that proved successful. As they have grown, more plans have been put into practice, such as a widely popular frequent flyer program and their now legendary customer service. These strategies have proved successful, as Southwest is the only airline to have maintained a profit in the recent past.…
The impact of operational activities and decision making has greatly changed with the new system. The system has helped the airlines maintain accounts with other airlines, as well as help processes internal information between departments with more efficiency since everything is done online (Laudon & Laudon, 2013). Now that customers can plan, book, and pay online for their trips it as boosted customer satisfaction with faster service. This system has allowed airlines to make good strategic decisions on which routes to monopolize, and how to improve their services by accessing information about previous customers stored on the system. However, this system can affect customers’ decision while they are booking for example if the system is slow or not user friendly customers may be more likely to go to a different site to book their flights.…
The buzz in the airline industry in February 2013 was all about the potential merger between American Airlines and US Airways since that would make the merged company the number one airline in the industry globally.…
Ctrip’s success was fueled by a number of forces, which can be better understood by viewing them through the PESTEL framework (see Exhibit 1 below). For example, Ctrip capitalized on the Chinese Internet boom by offering travelers a website with “superior content, [an] extensive online community, and user-friendly design.”2 This website, Ctrip.com, gave the company a competitive advantage over offline competitors, who were still soliciting customers over the phone. This competitive advantage has proven sustainable for Ctrip, as the website continues to attract customers with new, unique features. For example, the recent addition of “one-hour express ticketing,” allows travelers to book flights as little as one hour prior to departure. As long as Ctrip continues to add innovative online features and capabilities, its website will surely give the firm a sustainable competitive advantage.…
What have been shown is that the real-time BI hasn’t just improved and completed all of the goals, Continental has even started to use the system in much broader perspective.…
The development of the ICT specially the internet has empowered the consumers and is giving them an exceptional value for money and time (Twenty years on and 10 years after the Internet: The state of eTourism research, 2008). Where internet is helping consumers to save their time on the same time internet is helping the companies to reduce their costs’. Consumers are now able book their paperless tickets online. The fares have been reduced as there are no agents wanting their commission. Sometimes consumers also get financial incentives for self-booking online (eAirlines: strategic and tactical use of ICTs in the airline industry,buhalis,2004). No-frills airlines are using their web sites to attract and communicate directly with consumers (E. Jorgensen, Southwest Airlines: Success Story).This enables them to bypass travel agencies and their commissions. In 2003, both Easyjet and Ryanair achieved more than 92% of their bookings through their web sites, whilst Southwest sold 50% of its tickets on its web site (eAirlines: strategic and tactical use of ICTs in the airline industry).…