The challenges facing this airline are many. The most important of which may be the corporate culture within the company. The leadership of the company has a leaning toward looking solely at the numbers without considering the impact of marketing or even customer service to the bottom line. “Financial success often depends on marketing ability. Finance, operations, accounting, and other business functions will not really matter if there is not sufficient demand for goods and services so the company can make a profit” (Kotler & Keller, 2007). Within this framework of difficulties the marketing department must also deal with the market for larger airlines like this one which have been on the decline over the last several years. Customers are seeking better deals in a sinking world economy while also expecting decent customer services and at least a modicum of comfort. It also appears that many of the airlines competitors have found a way…
Growing tourist industry could help increase market position. In (Tully 2015) flight plan article, it was found that long-haul business travel is the biggest, fastest-growing segment in U.S. air travel. It was the AirTran purchase that gave Southwest a base of foreign routes (Tully 2015, p. 9)…
This internal business analysis is on Southwest Airlines, which was founded in 1967 by Rollin King and Herb Kelleher. The main focus for Southwest Airlines was to provide low cost flights for their customers, and also have exceptional customer satisfaction. Southwest is a leading airline company that continues to do well in an industry that has been historically challenging. For instance, in the span of two years (2005-2007) five major airlines have filed for bankruptcy. The challenges are great in the airline industry, because competitors are trying to imitate the “low-cost” offering of Southwest. Many companies have tried to do what Southwest has done, and many have failed to stay in business. Surprisingly, many of those companies were started by ex-employees of Southwest. Southwest currently has a profitability record for the past thirty six years, which is spectacular in such a challenging industry. Herb Kelleher has been replaced by Gary C. Kelly, as the president when he resigned in May of 2008. Southwest is in the process of expanding the locations they serve so that they can increase market share, and also find ways to cut costs without losing their quality. In order for southwest to continue their consecutive financial success there is a necessity for excellence in the execution process of their strategy.…
Markets: Vacation goers who would prefer flying instead of driving long hours and business travelers where they can get a faster service because they have to be somewhere in a specific time.…
The Airline industry was incepted in the 1930’s and was heavily regulated by the Civil Aeronautics Board. The CAB determined which routes they could fly, ticket rates, and when they could schedule flights. Airline consumers were severely limited by routes and schedules and many were locked out by high fares. During this time the Airline Industry continued to operate and grow, but did not generate impressive profits. In 1978 the US Government began the process of deregulating the Airlines. The Airline Deregulation Act was approved by Congress on October 24, 1978. As a result, Airlines were able to fly to new destinations, flown more frequently, and dramatically lowered costs. Airlines also innovated new services such as overnight and same day shipping, and determined what consumer in flight amenities to offer. One estimate by the Air Transport Association suggests that ticket prices today are 44.9 percent lower in real terms than they were in 1978. (Brennan…
Politically and legally, governments had always supported aeronautics by shielding national manufacturers against competition and subsidizing their research and development projects. To some extent, foreign competition called for the intervention of the World Trade Organization to control anti-dumping policies. Governments also got involved in establishing environmental regulations to control the damaging effects of air transportation on the environment. The deregulation of the aerospace industry in the mid-1990s led to a socio-cultural change in consumer's preference from high comfort level to lower prices. The latter pushed airline companies to seek low-cost-carriers to reduce costs. Economically, airline carriers adopted flexible financial models with manufacturers to meet fluctuating aircrafts demand and develop the business further. Technologically, airline manufacturers focused on innovating their core competencies through R&D and achieved economies of scale by outsourcing airplane segments to suppliers and developing strategic partnerships with subcontractors.…
Fuel prices- if the fuel prices are high it would make it difficult to travel, or it would result in losing a tremendous amount of money.…
Northwest Airlines and American Airlines will be compared thoroughly in many aspects. Globalization, diversity, ethics and technology will be addressed in various ways. All four themes will be addressed through the strength, fit and adaptive ness of both company's cultures. The overall organizational culture of both Northwest Airlines and American Airlines will be clear.…
Better technology is allowing planes to remain in the air for longer and this allows an airline to expand into international destinations. Superior safety…
Airtex Aviation conducted activities through six informal departments at the time of purchase: Service, Flight, Aircraft sales, Parts, Avionics, and Fuel Line. The organizational structure at this time was extremely centralized, and it gave too much authority and responsibilities to Sarah Arthur, Airtex’s under qualified accountant. She received all bills, checks and cash for all departments and kept them in her records. She also managed the receivables and payables for all six departments, none of which she communicated with the departments. So, as a result of Sarah’s central repository approach to information sharing, the department managers had no understanding of the profitability of their operations, and no basis for good decision-making. Frank and Ted knew that in order to address these issues they would have to create a new control system to completely decentralize Airtex’s organizational structure.…
1. Southwest Airlines in 2010: Culture, Values, and Operating Practices: Essentials of Strategic Management, Third…
- Terrorist attacks of September 11, 2000 made the demand for air travel declined sharply (annual passenger revenues dropped 13.5% in 2001 to $80.9 billion). The cost of security and insurance raised (the installation of bulletproof cockpit doors, airport security tax). Global economic slowdown curtailed full-fare business travel…
After the 9 /11 attack operating in the small markets has become uneconomical due to increased costs . Legal measures by the government translated to higher costs to airlines , which were transferred to consumers . Non-profit airport authorities have also led to the increased prices that act as a disincentive to air transportation . Most customers…
Alexandra Marks. Delta-Northwest Merger: Pilots’ Demands Hold Any Deal Up. Retrieved March 4, 2008, from:…
Because pilots and stakeholders fear that the airline is no longer the focus of the…