American Airlines Vs United Airlines Comparison Essay
American Airlines vs. United Airlines – A Comparison
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Readers of this site know that I have selected American Airlines as my airline of choice. I live near Austin, Texas: only Southwest offers more service from Austin than American, but Southwest does not offer international service or service to Hawaii, so that eliminated them from my consideration. I try to do all of my traveling on American Airlines or one of its Oneworld partners.
I recently had to attend a conference in San Francisco: the corporate travel agent made the reservations for me and I had no choice in the matter, I had to fly on United Airlines. I hadn’t flown United in several years, and thought a comparison of UA and AA would be of interest to you.
I have flown around the continental United States, to …show more content…
Hawaii, and to Europe on American Airlines, and have elite status. I have taken three flights on UA, and do not have elite status.
Flight Status Notification:
Each airline lets you register for free flight status notification. Once you sign up for this service, the airline’s computer will call you in advance of your flight to let you know if it is on time and what the departure gate is. I always sign up for this at American and have found it to be a very valuable feature. I also found that there is a difference between the way the two airlines operate their notification systems.
American continually updates their notifications. If you are supposed to depart from Gate 14, but there has been a change to Gate 6 instead, you will get a call to let you know. United apparently does not offer this feature. My flight home from San Francisco had a layover in Denver. I received a call with one gate listed for my departure, but the video screens in the airport listed another gate that was at the other end of the terminal. I have never experienced a disagreement between the video screens and the notification system on American, but now I had this problem with United. I decided to go to the gate listed on the video screen, and that was the correct decision. If I had gone to the gate provided by the flight notification system, I would have missed my flight.
United also called me to let me know the arrival time of my flight. Since I did not get this message until after I had landed and turned on my cell phone, this did not help me at all. However, if you set it up to have the call go to someone who is meeting you at the airport, it would be a great help.
Check In Process:
American allows passengers to check in with a reservations agent, or use a self-serve kiosk. If you check in with the agent, he/she issues your boarding pass and receives your checked baggage. If you use the kiosk, the kiosk issues your boarding pass, but you then have to stand on another line to hand in your baggage.
United has combined this. Everyone stands on one line (unless they are flying First Class, which has a separate process) until they reach the check in counter. They use a computer terminal to check in, then give their checked baggage to the agent behind the counter.
Extra Legroom:
I have elite status with American Airlines, this allows me to reserve exit row seating which gives me extra legroom.
I checked in for my Austin – San Francisco flight and the agent asked if I would like a seat with extra legroom. Would I? It’s a four-hour flight! Of course I would! How nice of them to offer!
“Yes, I would love extra legroom!.”
“That will be $49, would you like to pay with cash or charge?”
“Neither, thanks for offering.”
Since I don’t have elite status with United I could only get extra legroom by paying the extra fee. I declined that offer.
On my return from San Francisco I took two flights, San Francisco-Denver and Denver-Austin. The cost for extra legroom was $78. Again, I refused this benefit.
Aircraft:
Most of my flights on American are on MD-80s, some of the oldest aircraft in their fleet. My United flights were on an Airbus A-319, Boeing 737 and 757. In each case, the United aircraft felt newer than the MD-80s I normally get on American.
In-flight Entertainment:
American does not offer in-flight entertainment (IFE) on the MD-80, so I rarely experience it. All three of the United flights offered it. None of the flights were long enough to show a movie, but there were several TV shows. In addition, there was the standard choice of music channels to listen to.
My favorite feature on United is Channel 9. This channel lets you listen to the air traffic controllers as they talk to the aircraft, and the replies from the cockpit crews. I’ve always been fascinated by this and really enjoy listening to it. You never know what you will hear.
You’ll hear the expected “United 43 heavy clear for departure on runway 27 left” mesages, but also hear pilots asking if they can change their altitude or course to avoid turbulence. When we backed away from the terminal in Denver for the flight to Austin, I heard the controller tell our pilot “I have 15 aircraft getting ready to depart in the next few minutes. If you can leave now, I can put you in front of them all.” Needless to say, our pilot accepted that offer!
When we landed in Austin I heard our pilot tell the controller that the spotlights in a maintenance area were shining directly in her eyes as she taxied to the terminal.
I love Channel 9 and wish other airlines offered it.
Food:
It’s 2008 and neither airline offers food in coach unless you buy a snack box.
You can get a complimentary non-alcoholic beverage.
Power Outlets
American has 12-volt power outlets on its aircraft, providing a place to plug in your laptop or DVD player. United does not. This is a definite advantage to American, particularly on a long flight where your battery will not last long enough to get you to your destination.
Arrival Information:
Without exception, every American Airlines flight I’ve taken has featured arrival information announcements. One of the flight attendants announces our arrival gate, where to pick up our luggage, and departure information for connecting flights.
United offered no information other than the recommendation that we review the video screens in the terminal for information. This was a problem when we arrived in Austin as passengers from my flight wandered around the luggage area trying to figure out which carousel had our bags. An on-flight announcement would have helped prevent this.
Summary:
There you have it, a short and totally un-scientific comparison of American and United Airlines. Did I find one airline to be dramatically better than the other?
No.
American offers more service from Austin than United does, so I will continue to give them my business.
American Airlines, United Airlines
The airline industry has always been and continues to be the most fiercely competitive business sector in all facets of its operations. Operating on paper thin margins the drop in passenger traffic brought on by the events of September 11th, 2001 have affected domestic United States airlines as well as all global carriers. The events of that day have caused governmental intervention in the form of loan guarantees, compensation for terrorist attack losses, as well as insurance related to war risk (Shane, 2003). The Associate deputy secretary of Transportation stated that the industry is in its “…worst financial crisis…”(Shane, 2003), since the industry was deregulated in 1978. It is important to understand that two differing types of airline carriers exist in the United States. The majors refer to airlines earning revenues in excess of $1 billion USD annually and generally they provide national as well as international service. These airlines cater to the business class customer and passengers who either expect or desire full in flight services such as meals and related amenities. American Airlines, Delta Air Lines, United Air Lines, U.S. Airways, Continental Airlines and Northwest Airlines fit these designations (Mayer, 2002). The discount air carriers have changed the face of the airline industry with their no frills, low-cost airfares and have put pressure on the majors in terms of eroding their market share.
The preceding battle between discount carriers has further exacerbated the majors thin operating margins and has resulted in Delta, Continental, Northwest, United and US Airways (Beck, 2005) filing for protection under Chapter 11 of the United States bankruptcy laws while they restructure and renegotiate union contracts and creditor agreements. United States Senate Commerce Committee Chairman John McCain has stated that the United States government should be “…reluctant to do anything that might keep inefficient businesses afloat” (Shane, 2003). This is the climate in which the subject airline, American Airlines operates. * Political
The political stability of the United States was severely shaken by the terrorist events of September 11, 2001, and this directly resulted in a catastrophic drop in business as well as personal air travel (Ito et al, 2003). The preceding along with the following areas have impacted negatively on earnings as well as profitability among the majors: * Pricing regulations * Wage legislation and union requirements * Deregulation policies of 1978 * Increased emphasis on national and airport security * Economic
The overall economic climate in the United States prior to the events of September 11, 2001 called for a mild recession and the airline industry was wrestling with discount carriers. The pre 9-11 airline climate forecast a slight contraction as a result of the reversionary climate which was dramatically impacted by the events of 9-11 and the resulting economic aftermath (Ito et al, 2003): * Dramatic slowdown of the economic growth rate * Increase in fuel costs * Balance of trade accounts * Inflationary and fluctuations of the dollars against the Euro, and Yen * Social
The emphasis on September 11th throughout these varied analysis is due to the sweeping impact that event had on global events in all theatres. The social implications thus shaped or amplified are as follows (Mayer, 2002): * Increased layoffs impacting all income groups * Sharp decrease in lower and middle class travel * Decline in airline related vacations destinations * Negative impact of air travel safety brought on by the events of 9-11 * Decrease in general airline related travel plans by consumers * Low-fare travel stigma attitude shift to an acceptable alternative * Technological
The Internet’s impact on business and consumer purchasing habits heralded in a new age of information exchange which changed the manner in which airline tickets are sold. * Airline SABRE system * Decrease in airline travel agencies * Introduction of Internet airline ticket reservations and ticketing * Entry of Travelocity, Orbitz, Cheaptickets, Expedia and other best price shopping services * The availability of the Internet as a consumer and business fare and flight shopping tool * Porter’s Five Forces
Michael Porter’s ‘Five Forces” model (QuickMBA, 2005) provides a framework to view the airline industry from the perspective of five forces that influence it: * Rivalry
American ranks as the world’s largest airline in terms of passengers carried, however is rated number 11th in terms of overall airline quality (Holderbach, 2004). * Low-fare airlines garnered three of the top four spots in airline quality ratings, 1. Jet Blue, 2. Alaska, 3. Southwest, 4. America West. All but Alaska Airlines are low fare carriers. The remaining airlines are 5. US Airways, 6. Northwest, 7. Continental, 8. AirTran, 9. United, 10. ATA, 11. American, 12. Delta, 13. American Eagle and 14 Atlantic Southeast (Holderbach, 2004). * Some of the more important facets within this category of the Five Forces model are: * slow market growth since 9-11 * high fixed operating costs * low relative levels of product differentiation among the majors * inroads of the low-fare carriers in the changing perception of air travel * shake out of the industry since 9-11 in terms of bankruptcies and failures * Threat of Substitutes
Within Porter’s model substitute services come into play when demand exceeds supply, or vice versa. In the airline industry the excess supply has been attacked by low-fare carriers who have continually gained market share. * Buyer Power
The airline industry suffers from oversupply as well as fixed costs which served as the foundation for low fare carriers who offer no frill flights in return for discounted fares. This approach effectively pulled the casual traveler and spread to frequent travelers and some classes of business travel for companies seeking to cut costs. Buyer demand is re-shaping the airline industry as a result of these options. * Supplier Power
In terms of this category, fuel is the single largest airline cost expenditure item which affects all firms equally. Low Fare carriers by eliminating frills lower their per flight operating costs which have and is attracting scores of travelers to their fold. * Barriers to Entry / Threat of Entry
Traditionally, the high cost of entry in the airline industry reduced the treat of entry by competitive companies. However the business model offered by low fare carriers exploited the lower end segment of the market via price and provided a foundation for the entry of Southwest, Jet Blue, America West and others (Ito et al, 2003). * Stakeholders Analysis
By definition stakeholders are “…individuals or organizations who stand to gain or lose from the…” (Nuseibeh et al, 2000) success as well as failure of an enterprise, system or industry. A stakeholder analysis identifies the key stakeholders and how their interests affect the industry as well as specified firms within said industry in terms of their interests and how such impact viability as well as risk. In terms of American Airlines as well as the industry, the key stakeholders in today’s terms are: * The varied unions that comprise the industry * Ticketing systems, which include those representing the airlines in code sharing agreements as well as internet ticketing operations such as Expedia, Orbitz and others. * Oil industry, as fuel suppliers * America’s business community * Consumers
All of the preceding groups and institutions have an interest in seeing the American Airlines succeed as competition is the driving force behind innovation, pricing controls, convenience and choice. * SWOT Analysis
The strengths, weaknesses, opportunities or threats internal to a company represent the strategic environment known as a SWOT analysis (QuickMBA, 2004). * Strengths
Some of the advantages that American Airlines has in comparison to its competitors are (American Airlines, 2005): * Recognizable brand name * Largest global airline in terms of passenger traffic * National and International routes serving all corners of the globe * Perception as a major carrier with the commensurate levels of service * Weaknesses * internal flight amenities draining profits * inability to compete with low fare carriers on price * lack of competitive pricing to attract casual traveler base * vulnerability to pricing * Opportunities (American Airlines, 2005). * code sharing agreements with domestic and international airlines * SABRE ticketing system * Presence at most airports * American Eagle regional routes * Lucrative route structure * Threats * thin operating margins favoring low fare carriers * public acceptance of low fare carrier concept * customer quality perception of low fare carriers that exceeds the majors * prolonged slow economy favors low fare carrier pricing structure * segmentation of the industry into business and discount carrier classifications * high fuel prices * government intervention
Chapter 2 – Conclusion
The intense competition in the airline industry along with thin operating margins and fuel costs along with other expenditures existed before the dramatic events of September 11th. The strengths of American Airlines in being the world’s largest airline provides it with a huge customer base that is familiar with the airline. This represents the core of all marketing, customer retention as well as the foundation to attract new customer trial. Customer retention and utilization represent the primary advantage that American Airlines enjoys and needs to utilize to protect its position as well as build upon. The American Eagle division provides the company with an additional customer convenience marketing tool via intra city (regional) destination traffic. In order to accomplish the preceding objective the company must increase its quality of service from its current 11th position to increase customer satisfaction. The 50/50 mix of business and leisure travelers that comprise its customer base has remained relatively constant and business class travelers contribute heavily to profits as a result of the higher fares paid for first class and business class seating (American Airlines, 2005).
Utilization of target marketing with concentration on the frequent flier base represents American’s primary advantage to capitalize upon since is does not compete in a low fare platform. Tightened restrictions on fares has closed a lot of the gap, thus consumer perceptions in the higher income categories represent a huge customer base for American to capitalize on in stealing customers from the other majors as a primary strategy and eroding the fringe low fare customer base as a secondary target market. Technology in terms of software advances along with code sharing, peaking and American’s route and connection structures offer convenience. Increased international travel also helps the company as a result of its global routes and destinations. American’s size, reach, reputation, fleet and presence at over 154 airports reinforces the preceding (American Airlines, 2005). The company’s corporate vision states its objectives are to: 1. set industry standard for safety and security, 2. provide superior customer service, 3. produce returns for stakeholders and shareholders by increasing business and thus revenue opportunities for vendors and allied firms 4. further solidify the brand name and image as a premier carrier 5. increase creative ticketing, promotions, vacation packages and associated areas to distance the company from low fare carriers and thus minimize their effects, 6. capitalize upon inherent advantages
As the world’s largest carrier American Airline’s business and leisure base provides the customer foundation to enable it to compete successfully against other majors as well as differentiate itself from low fare carriers. This ability to be the choice in the full flight service category along with the number of airports, seamless domestic and international route structure that enable it to offer direct service to the most destinations via its own branded airline represents a key convenience and thus marketing factor to garner success in this highly competitive environment.
1 SWOT-ENVIROMENTAL SCANNING......
2..STRATEGIC IMPLEMENTATION....
.3.WHAT KIND OF INTEGRATION?VERTICAL OR HORIZONTAL?.....
4.ORGANIZATIONAL STRUCTURE....FUNCIONAL, GEOGRAPHIC,ETC...WHAT KIND DOES EACH OF THE AIRLINES HAS?..
Y 5..WHICH ONE OF THE 2 AIRLINES IS DOING BETTER?? AND WHY?
H3 horizontal integration because they are expanded in the same industry like united airlines adquiring American n the Airline industry, all strategic alliances between carriers are called horizontal alliances: which means that they are sharing agreements with others companies offering. Both gained in size and dominance
4 the parent company of American Airlines, has several businesses within its corporate structure including: –American Airlines
–American Airlines Cargo
–American Eagle
–American Beacon Advisors
The facilities of American Airlines include:
–Flagship University
–American Airlines Travel Academy
–American Airlines Flight Academy
–American Airlines C.R. Smith Museum
Key Statistics
–AMR holds assets of $29,495 million.
–AMR has 88,400 employees.
–AMR operates in virtually all the major continents of the world.
Organization
The Corporate Structure includes:
–Board of Directors
–Core Businesses
–AMR Corporation Officers
–American Airlines Senior Management
–American Airlines Management
–American Eagle Management
–American Beacon Advisers
International Ranking
–AMR ranks 312th in the Fortune Global 500 list of 2006.
–AMR ranks 902nd in the world according to the Forbes Magazine.
United Air Lines, Inc., (NYSE: UAL) is a major airline based in the United States and one of the world's largest airlines with 48,000 employees[11] and 359 aircraft.[12] It is a subsidiary of United Continental Holdings, Inc. formerly, UAL Corporation, with corporate offices in Chicago. United's largest hub is Chicago's O'Hare International Airport. United also has hubs in Washington Dulles International Airport, Denver International Airport, San Francisco International Airport, Los Angeles International Airport and Narita International Airport near Tokyo.[13] United is a founding member of the Star Alliance, the largest airline alliance in the world, and offers connections to over 1,000 destinations in over 170 countries worldwide.[14]
On Sunday, May 2, 2010, the Boards of Directors at Continental Airlines and UAL Corp. approved a stock-swap deal that would combine them into the world's largest airline in revenue passenger miles and second largest in fleet size and destinations after Delta Air Lines. The new airline will take on the United Airlines name, Continental's logo and be based in United's hometown of Chicago. The parent company of the new carrier will be called United Continental Holdings, Inc. The new United will be run by Continental's CEO, Jeffery Smisek, along with United Airline's CEO, Glenn Tilton, serving as non-executive Chairman of the board until his retirement two years hence. United's pilots union announced that they "are fully prepared to protect and defend the interests of all United pilots."[15]
On August 27, 2010, the U.S. Department of Justice approved the US$3 billion merger.[16] Share holders of both companies approved the deal on September 17, 2010. The transaction was completed on October 1, 2010.[17]
CEO
John Fife
Director
Richard Brown
Director
Ronald Hall
Director
Emmett Moten
Director
Darrel Francis
Director
Bruce Galloway
Director
Grayson Beck
Director
William Brooks
UAHC Health Plan
SD
CFO
Robert Sullivan
Legal & Secretary
MW
Pulse Systems
HB
Control
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There are three main components for effective leadership, competency, enthusiasm and integrity. Of the three main components, integrity is the most important. Effective leadership starts with honesty, trust and empathy.
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Readers of this site know that I have selected American Airlines as my airline of choice. I live near Austin, Texas: only Southwest offers more service from Austin than American, but Southwest does not offer international service or service to Hawaii, so that eliminated them from my consideration. I try to do all of my traveling on American Airlines or one of its Oneworld partners.
I recently had to attend a conference in San Francisco: the corporate travel agent made the reservations for me and I had no choice in the matter, I had to fly on United Airlines. I hadn’t flown United in several years, and thought a comparison of UA and AA would be of interest to you.
I have flown around the continental United States, to …show more content…
Hawaii, and to Europe on American Airlines, and have elite status. I have taken three flights on UA, and do not have elite status.
Flight Status Notification:
Each airline lets you register for free flight status notification. Once you sign up for this service, the airline’s computer will call you in advance of your flight to let you know if it is on time and what the departure gate is. I always sign up for this at American and have found it to be a very valuable feature. I also found that there is a difference between the way the two airlines operate their notification systems.
American continually updates their notifications. If you are supposed to depart from Gate 14, but there has been a change to Gate 6 instead, you will get a call to let you know. United apparently does not offer this feature. My flight home from San Francisco had a layover in Denver. I received a call with one gate listed for my departure, but the video screens in the airport listed another gate that was at the other end of the terminal. I have never experienced a disagreement between the video screens and the notification system on American, but now I had this problem with United. I decided to go to the gate listed on the video screen, and that was the correct decision. If I had gone to the gate provided by the flight notification system, I would have missed my flight.
United also called me to let me know the arrival time of my flight. Since I did not get this message until after I had landed and turned on my cell phone, this did not help me at all. However, if you set it up to have the call go to someone who is meeting you at the airport, it would be a great help.
Check In Process:
American allows passengers to check in with a reservations agent, or use a self-serve kiosk. If you check in with the agent, he/she issues your boarding pass and receives your checked baggage. If you use the kiosk, the kiosk issues your boarding pass, but you then have to stand on another line to hand in your baggage.
United has combined this. Everyone stands on one line (unless they are flying First Class, which has a separate process) until they reach the check in counter. They use a computer terminal to check in, then give their checked baggage to the agent behind the counter.
Extra Legroom:
I have elite status with American Airlines, this allows me to reserve exit row seating which gives me extra legroom.
I checked in for my Austin – San Francisco flight and the agent asked if I would like a seat with extra legroom. Would I? It’s a four-hour flight! Of course I would! How nice of them to offer!
“Yes, I would love extra legroom!.”
“That will be $49, would you like to pay with cash or charge?”
“Neither, thanks for offering.”
Since I don’t have elite status with United I could only get extra legroom by paying the extra fee. I declined that offer.
On my return from San Francisco I took two flights, San Francisco-Denver and Denver-Austin. The cost for extra legroom was $78. Again, I refused this benefit.
Aircraft:
Most of my flights on American are on MD-80s, some of the oldest aircraft in their fleet. My United flights were on an Airbus A-319, Boeing 737 and 757. In each case, the United aircraft felt newer than the MD-80s I normally get on American.
In-flight Entertainment:
American does not offer in-flight entertainment (IFE) on the MD-80, so I rarely experience it. All three of the United flights offered it. None of the flights were long enough to show a movie, but there were several TV shows. In addition, there was the standard choice of music channels to listen to.
My favorite feature on United is Channel 9. This channel lets you listen to the air traffic controllers as they talk to the aircraft, and the replies from the cockpit crews. I’ve always been fascinated by this and really enjoy listening to it. You never know what you will hear.
You’ll hear the expected “United 43 heavy clear for departure on runway 27 left” mesages, but also hear pilots asking if they can change their altitude or course to avoid turbulence. When we backed away from the terminal in Denver for the flight to Austin, I heard the controller tell our pilot “I have 15 aircraft getting ready to depart in the next few minutes. If you can leave now, I can put you in front of them all.” Needless to say, our pilot accepted that offer!
When we landed in Austin I heard our pilot tell the controller that the spotlights in a maintenance area were shining directly in her eyes as she taxied to the terminal.
I love Channel 9 and wish other airlines offered it.
Food:
It’s 2008 and neither airline offers food in coach unless you buy a snack box.
You can get a complimentary non-alcoholic beverage.
Power Outlets
American has 12-volt power outlets on its aircraft, providing a place to plug in your laptop or DVD player. United does not. This is a definite advantage to American, particularly on a long flight where your battery will not last long enough to get you to your destination.
Arrival Information:
Without exception, every American Airlines flight I’ve taken has featured arrival information announcements. One of the flight attendants announces our arrival gate, where to pick up our luggage, and departure information for connecting flights.
United offered no information other than the recommendation that we review the video screens in the terminal for information. This was a problem when we arrived in Austin as passengers from my flight wandered around the luggage area trying to figure out which carousel had our bags. An on-flight announcement would have helped prevent this.
Summary:
There you have it, a short and totally un-scientific comparison of American and United Airlines. Did I find one airline to be dramatically better than the other?
No.
American offers more service from Austin than United does, so I will continue to give them my business.
American Airlines, United Airlines
The airline industry has always been and continues to be the most fiercely competitive business sector in all facets of its operations. Operating on paper thin margins the drop in passenger traffic brought on by the events of September 11th, 2001 have affected domestic United States airlines as well as all global carriers. The events of that day have caused governmental intervention in the form of loan guarantees, compensation for terrorist attack losses, as well as insurance related to war risk (Shane, 2003). The Associate deputy secretary of Transportation stated that the industry is in its “…worst financial crisis…”(Shane, 2003), since the industry was deregulated in 1978. It is important to understand that two differing types of airline carriers exist in the United States. The majors refer to airlines earning revenues in excess of $1 billion USD annually and generally they provide national as well as international service. These airlines cater to the business class customer and passengers who either expect or desire full in flight services such as meals and related amenities. American Airlines, Delta Air Lines, United Air Lines, U.S. Airways, Continental Airlines and Northwest Airlines fit these designations (Mayer, 2002). The discount air carriers have changed the face of the airline industry with their no frills, low-cost airfares and have put pressure on the majors in terms of eroding their market share.
The preceding battle between discount carriers has further exacerbated the majors thin operating margins and has resulted in Delta, Continental, Northwest, United and US Airways (Beck, 2005) filing for protection under Chapter 11 of the United States bankruptcy laws while they restructure and renegotiate union contracts and creditor agreements. United States Senate Commerce Committee Chairman John McCain has stated that the United States government should be “…reluctant to do anything that might keep inefficient businesses afloat” (Shane, 2003). This is the climate in which the subject airline, American Airlines operates. * Political
The political stability of the United States was severely shaken by the terrorist events of September 11, 2001, and this directly resulted in a catastrophic drop in business as well as personal air travel (Ito et al, 2003). The preceding along with the following areas have impacted negatively on earnings as well as profitability among the majors: * Pricing regulations * Wage legislation and union requirements * Deregulation policies of 1978 * Increased emphasis on national and airport security * Economic
The overall economic climate in the United States prior to the events of September 11, 2001 called for a mild recession and the airline industry was wrestling with discount carriers. The pre 9-11 airline climate forecast a slight contraction as a result of the reversionary climate which was dramatically impacted by the events of 9-11 and the resulting economic aftermath (Ito et al, 2003): * Dramatic slowdown of the economic growth rate * Increase in fuel costs * Balance of trade accounts * Inflationary and fluctuations of the dollars against the Euro, and Yen * Social
The emphasis on September 11th throughout these varied analysis is due to the sweeping impact that event had on global events in all theatres. The social implications thus shaped or amplified are as follows (Mayer, 2002): * Increased layoffs impacting all income groups * Sharp decrease in lower and middle class travel * Decline in airline related vacations destinations * Negative impact of air travel safety brought on by the events of 9-11 * Decrease in general airline related travel plans by consumers * Low-fare travel stigma attitude shift to an acceptable alternative * Technological
The Internet’s impact on business and consumer purchasing habits heralded in a new age of information exchange which changed the manner in which airline tickets are sold. * Airline SABRE system * Decrease in airline travel agencies * Introduction of Internet airline ticket reservations and ticketing * Entry of Travelocity, Orbitz, Cheaptickets, Expedia and other best price shopping services * The availability of the Internet as a consumer and business fare and flight shopping tool * Porter’s Five Forces
Michael Porter’s ‘Five Forces” model (QuickMBA, 2005) provides a framework to view the airline industry from the perspective of five forces that influence it: * Rivalry
American ranks as the world’s largest airline in terms of passengers carried, however is rated number 11th in terms of overall airline quality (Holderbach, 2004). * Low-fare airlines garnered three of the top four spots in airline quality ratings, 1. Jet Blue, 2. Alaska, 3. Southwest, 4. America West. All but Alaska Airlines are low fare carriers. The remaining airlines are 5. US Airways, 6. Northwest, 7. Continental, 8. AirTran, 9. United, 10. ATA, 11. American, 12. Delta, 13. American Eagle and 14 Atlantic Southeast (Holderbach, 2004). * Some of the more important facets within this category of the Five Forces model are: * slow market growth since 9-11 * high fixed operating costs * low relative levels of product differentiation among the majors * inroads of the low-fare carriers in the changing perception of air travel * shake out of the industry since 9-11 in terms of bankruptcies and failures * Threat of Substitutes
Within Porter’s model substitute services come into play when demand exceeds supply, or vice versa. In the airline industry the excess supply has been attacked by low-fare carriers who have continually gained market share. * Buyer Power
The airline industry suffers from oversupply as well as fixed costs which served as the foundation for low fare carriers who offer no frill flights in return for discounted fares. This approach effectively pulled the casual traveler and spread to frequent travelers and some classes of business travel for companies seeking to cut costs. Buyer demand is re-shaping the airline industry as a result of these options. * Supplier Power
In terms of this category, fuel is the single largest airline cost expenditure item which affects all firms equally. Low Fare carriers by eliminating frills lower their per flight operating costs which have and is attracting scores of travelers to their fold. * Barriers to Entry / Threat of Entry
Traditionally, the high cost of entry in the airline industry reduced the treat of entry by competitive companies. However the business model offered by low fare carriers exploited the lower end segment of the market via price and provided a foundation for the entry of Southwest, Jet Blue, America West and others (Ito et al, 2003). * Stakeholders Analysis
By definition stakeholders are “…individuals or organizations who stand to gain or lose from the…” (Nuseibeh et al, 2000) success as well as failure of an enterprise, system or industry. A stakeholder analysis identifies the key stakeholders and how their interests affect the industry as well as specified firms within said industry in terms of their interests and how such impact viability as well as risk. In terms of American Airlines as well as the industry, the key stakeholders in today’s terms are: * The varied unions that comprise the industry * Ticketing systems, which include those representing the airlines in code sharing agreements as well as internet ticketing operations such as Expedia, Orbitz and others. * Oil industry, as fuel suppliers * America’s business community * Consumers
All of the preceding groups and institutions have an interest in seeing the American Airlines succeed as competition is the driving force behind innovation, pricing controls, convenience and choice. * SWOT Analysis
The strengths, weaknesses, opportunities or threats internal to a company represent the strategic environment known as a SWOT analysis (QuickMBA, 2004). * Strengths
Some of the advantages that American Airlines has in comparison to its competitors are (American Airlines, 2005): * Recognizable brand name * Largest global airline in terms of passenger traffic * National and International routes serving all corners of the globe * Perception as a major carrier with the commensurate levels of service * Weaknesses * internal flight amenities draining profits * inability to compete with low fare carriers on price * lack of competitive pricing to attract casual traveler base * vulnerability to pricing * Opportunities (American Airlines, 2005). * code sharing agreements with domestic and international airlines * SABRE ticketing system * Presence at most airports * American Eagle regional routes * Lucrative route structure * Threats * thin operating margins favoring low fare carriers * public acceptance of low fare carrier concept * customer quality perception of low fare carriers that exceeds the majors * prolonged slow economy favors low fare carrier pricing structure * segmentation of the industry into business and discount carrier classifications * high fuel prices * government intervention
Chapter 2 – Conclusion
The intense competition in the airline industry along with thin operating margins and fuel costs along with other expenditures existed before the dramatic events of September 11th. The strengths of American Airlines in being the world’s largest airline provides it with a huge customer base that is familiar with the airline. This represents the core of all marketing, customer retention as well as the foundation to attract new customer trial. Customer retention and utilization represent the primary advantage that American Airlines enjoys and needs to utilize to protect its position as well as build upon. The American Eagle division provides the company with an additional customer convenience marketing tool via intra city (regional) destination traffic. In order to accomplish the preceding objective the company must increase its quality of service from its current 11th position to increase customer satisfaction. The 50/50 mix of business and leisure travelers that comprise its customer base has remained relatively constant and business class travelers contribute heavily to profits as a result of the higher fares paid for first class and business class seating (American Airlines, 2005).
Utilization of target marketing with concentration on the frequent flier base represents American’s primary advantage to capitalize upon since is does not compete in a low fare platform. Tightened restrictions on fares has closed a lot of the gap, thus consumer perceptions in the higher income categories represent a huge customer base for American to capitalize on in stealing customers from the other majors as a primary strategy and eroding the fringe low fare customer base as a secondary target market. Technology in terms of software advances along with code sharing, peaking and American’s route and connection structures offer convenience. Increased international travel also helps the company as a result of its global routes and destinations. American’s size, reach, reputation, fleet and presence at over 154 airports reinforces the preceding (American Airlines, 2005). The company’s corporate vision states its objectives are to: 1. set industry standard for safety and security, 2. provide superior customer service, 3. produce returns for stakeholders and shareholders by increasing business and thus revenue opportunities for vendors and allied firms 4. further solidify the brand name and image as a premier carrier 5. increase creative ticketing, promotions, vacation packages and associated areas to distance the company from low fare carriers and thus minimize their effects, 6. capitalize upon inherent advantages
As the world’s largest carrier American Airline’s business and leisure base provides the customer foundation to enable it to compete successfully against other majors as well as differentiate itself from low fare carriers. This ability to be the choice in the full flight service category along with the number of airports, seamless domestic and international route structure that enable it to offer direct service to the most destinations via its own branded airline represents a key convenience and thus marketing factor to garner success in this highly competitive environment.
1 SWOT-ENVIROMENTAL SCANNING......
2..STRATEGIC IMPLEMENTATION....
.3.WHAT KIND OF INTEGRATION?VERTICAL OR HORIZONTAL?.....
4.ORGANIZATIONAL STRUCTURE....FUNCIONAL, GEOGRAPHIC,ETC...WHAT KIND DOES EACH OF THE AIRLINES HAS?..
Y 5..WHICH ONE OF THE 2 AIRLINES IS DOING BETTER?? AND WHY?
H3 horizontal integration because they are expanded in the same industry like united airlines adquiring American n the Airline industry, all strategic alliances between carriers are called horizontal alliances: which means that they are sharing agreements with others companies offering. Both gained in size and dominance
4 the parent company of American Airlines, has several businesses within its corporate structure including: –American Airlines
–American Airlines Cargo
–American Eagle
–American Beacon Advisors
The facilities of American Airlines include:
–Flagship University
–American Airlines Travel Academy
–American Airlines Flight Academy
–American Airlines C.R. Smith Museum
Key Statistics
–AMR holds assets of $29,495 million.
–AMR has 88,400 employees.
–AMR operates in virtually all the major continents of the world.
Organization
The Corporate Structure includes:
–Board of Directors
–Core Businesses
–AMR Corporation Officers
–American Airlines Senior Management
–American Airlines Management
–American Eagle Management
–American Beacon Advisers
International Ranking
–AMR ranks 312th in the Fortune Global 500 list of 2006.
–AMR ranks 902nd in the world according to the Forbes Magazine.
United Air Lines, Inc., (NYSE: UAL) is a major airline based in the United States and one of the world's largest airlines with 48,000 employees[11] and 359 aircraft.[12] It is a subsidiary of United Continental Holdings, Inc. formerly, UAL Corporation, with corporate offices in Chicago. United's largest hub is Chicago's O'Hare International Airport. United also has hubs in Washington Dulles International Airport, Denver International Airport, San Francisco International Airport, Los Angeles International Airport and Narita International Airport near Tokyo.[13] United is a founding member of the Star Alliance, the largest airline alliance in the world, and offers connections to over 1,000 destinations in over 170 countries worldwide.[14]
On Sunday, May 2, 2010, the Boards of Directors at Continental Airlines and UAL Corp. approved a stock-swap deal that would combine them into the world's largest airline in revenue passenger miles and second largest in fleet size and destinations after Delta Air Lines. The new airline will take on the United Airlines name, Continental's logo and be based in United's hometown of Chicago. The parent company of the new carrier will be called United Continental Holdings, Inc. The new United will be run by Continental's CEO, Jeffery Smisek, along with United Airline's CEO, Glenn Tilton, serving as non-executive Chairman of the board until his retirement two years hence. United's pilots union announced that they "are fully prepared to protect and defend the interests of all United pilots."[15]
On August 27, 2010, the U.S. Department of Justice approved the US$3 billion merger.[16] Share holders of both companies approved the deal on September 17, 2010. The transaction was completed on October 1, 2010.[17]
CEO
John Fife
Director
Richard Brown
Director
Ronald Hall
Director
Emmett Moten
Director
Darrel Francis
Director
Bruce Galloway
Director
Grayson Beck
Director
William Brooks
UAHC Health Plan
SD
CFO
Robert Sullivan
Legal & Secretary
MW
Pulse Systems
HB
Control
AD
There are three main factors of what constitutes integrity in a leader:
Trust
Honesty
Empathy.
Trust and Effective Organizational Leadership
Trust is the essence of integrity. Without trust you cannot have integrity. In an organization, a leader that is not trusted by their subordinates in essences is not a true leader. He or she may be ambitious and competent, but without trust they cannot have integrity and will fail as a leader. Managers for example may be ambitious and competent, but they will never be an effective leader without the trust of their subordinates.
Honesty and Effective Organizational Leadership
Honesty is the precursor to trust. A leader must be truthful and honest when interacting with subordinates, as well as others in an organization. Once a leader is perceived to be dishonest, they are also thought to be untrustworthy. The only types of individuals that would place trust in a dishonest person, are those individuals that are dishonest.
Empathy and Effective Organizational Leadership
Empathy means to put one's self into someone else’s shoes and to truly understand how they feel about a given situation. A true leader should demonstrate empathy by their actions and how they treat others. An extremely important part of gaining trust is to truly understand how someone else feels. A true leader pulls people into accomplishing their goals, not through coercion but through empathy for the feeling of others.
There are three main components for effective leadership, competency, enthusiasm and integrity. Of the three main components, integrity is the most important. Effective leadership starts with honesty, trust and empathy.