The basis for Value Creation of a classical hub-organised airline consists of its operating hub and spoke strategy. This system implies that all flights move along spokes connected to a hub placed at the centre. In fact all long-haul flights depart from the hub‚ to which all passengers are flown in the first place. Therefor it is necessary to own a heterogeneous fleet to secure an outstanding efficiency of the long distance flights. To have an attractive and used to capacity hub at one’s disposal
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Southwest Airlines stock returned more for their shareholders than any other stock in the same time period (Collins‚ 2006‚ Hospital Strategy IV: Southwest Airlines and thinking outside the box). Many companies have begun to take notice of the Southwest model; a model that allows Southwest to thrive while many of its contemporaries are faced with financial difficulties. The success of Southwest Airlines can be attributed to their structure. This structure has made it possible for Southwest Airlines founders
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Introduction Airline industry is one of the most efficient and competitive among long distance transport today. It has also changed the way in which people live and conduct business by shortening travel time and altering our concept of distance‚ making it possible for us to visit and conduct business in places once considered remote. Not only airline industry facilitates economic growth‚ world trade‚ international investment and tourism‚ it is also one of the major engines powering the globalization
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“What is the biggest managerial challenge facing the airline industry in the 21st century?” The biggest managerial challenge facing the airline industry in the 21st century is the competition between short hauled flights and other nodes of transportation. This is an issue that is developing mainly in places such as China‚ USA‚ and Europe. Air travel is a huge form of transportation in China. With over 33 certified Airlines‚ and 20 of them being domestic‚ the Chinese rely heavily on air travel
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Social factor Nowadays‚ using the smartphone is a trend‚ especially in Hong Kong. Everyone must have a smartphone even more than one. Smartphone penetration in Hong Kong has been rising‚1 from 35% in 2011‚ to 49% in 2012‚ to 63% in 2013. It reveals that there is a smartphone demand for Hong Kong people. In addition‚ according to the Google’s research report “2013 Our Mobile Planet: Hong Kong”‚ 96% of Hong Kong users browse the Internet daily with their smartphones‚ followed by Japan(94%)‚ Singapore(93%)
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Chapter 2‚ Assignment on the three cases 1. The greatest impact on the airline industry is its buyers. There are not many trusted airlines in function today and as consumers become more educated they always prefer to analyze cost with quality. Suppliers are the same for most of the airline companies‚ being Boeing and Airbus. As for the few rivals in this industry‚ it has always been the competition of providing the best services with the cheapest fares. New entrants on the other hand have to meet
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Airline Industry Competitive Structure The market structure of the Airline industry consists of a few corporations making its market structure an oligopoly. The airline industry is very volatile to changes in oil prices and can lead to fare increases and reducing overall profits. In 2011 for example jet fuel cost was at 2.84 a gallon up 243% from 1995 adjusted with inflation. In addition to what the current market is charging for a barrel of oil airlines have to deal with the “crack spread”‚ which
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TABLE OF CONTENTS QUESTION 1 1.1 Key Success Factors in the low-cost airline industry 3 1.2 Strategic group map example in the low-cost airline industry 5 QUESTION 2 2.0 Comprehensive analysis of SA low-cost airline industry 6 2.1 Buyer Power 10 2.2 Supplier Power 10 2.3 Substitutes 10 2.4 Rivalry 10 2.5 New Entrants 11 2.5.1 Government Policy barriers 11 2.5.2 Capital Requirements 11 2.5.3 Economies of Scale 11 2.6
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production industries‚ such as manufacturing and mining. However‚ there has been an increasing interest in the environmental effects of the service industry (Goedkoop‚ van Halen‚ te Riele‚ & Rommens‚ 1998). And this industry comprises a variety of activities‚ from restaurants to hospitals to financial institutions. The service industry merits its attention because of its large size and consequently the potential for environmental impacts (both negative and positive). And one of the service industries that
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Fuel Hedging in the Airline Industry: The Case of Southwest Airlines By Dave Carter a‚ Dan Rogers b‚ and Betty Simkins c a College of Business Administration‚ Oklahoma State University‚ Stillwater‚ OK 74078-4011‚ Phone: (405) 744-5104‚ Email: dcarter@okstate.edu b School of Business Administration‚ Portland State University‚ Portland‚ OR 97207-0751‚ Phone: (503) 725-3790‚ Email: danr@sba.pdx.edu c CONTACT AUTHOR: College of Business Administration‚ Oklahoma State University‚ Stillwater
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