...Classic Airlines Problem-Solving Process Barbara Terry MKT/571 – Marketing April 10, 2012 Clifford M. Lavin MSIM University of Phoenix Classic Airlines Problem-Solving Process Classic Airlines, one of the largest airline carriers in the world, servicing 240 cities, and more than 2,300 flights every day is in the service industry (UOPX Classic Airlines scenario, 2012). Classic Airlines is making a profit; however, its share prices have decreased 10% in the past year alone, and its customer base is also on the decline. This year the company had a net income of 10 million, whereas the previous year they had a net income of $71 million (UOPX Classic Airlines scenario, 2012). There are numerous internal and external factors contributing to Classic Airline’s current predicament. Decreasing stock prices, rising fuel costs, and declining consumer confidence are a few of the challenges the airline is facing. Additionally, internal disagreement among upper management is causing a direct problem to the Marketing team. Air travel around the globe is steadily increasing, and many people fly because it is necessary, however; minimal research has been conducted on how stress is related to people who fly frequently (Mawhinney, 2007). Classic Airlines management must take proactive measures, and conduct some in-depth research to determine the root cause of the current dilemmas. The purpose of this...
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...Name Instructor Course Date Emirates Airlines In the Middle East, Emirates Airlines is one of the market leaders in the air transport industry. It operates about 2,200 flights in a week across the whole world with its main hub in Dubai, UAE (Shaw 67). The company engages in offering commercial air transport services both in the UAE and internationally. This includes cargo, postal and passenger carriage services. Moreover, the company engages in offering retail and wholesale consumer goods, institutional and in-flight catering and hotel operations. Its headquarters is in Dubai where the coordination of all operations including flight takes place. The company was founded following the collapse of the Gulf Air in 1985 (Doganis, The Airline Business in the Twenty-first Century 56). It serves approximately 134 destinations in about 60 countries with a fleet size of 218. The mission of the airline mission is to deliver the best in-flight experience in the world. The values and visions of the company involve a stable and strong leadership team. The company believes in business ethics as the foundation of its success. It cares for both stakeholders and employees, the environment and the society it servers (Doganis, Flying Off Course: The Economics of International Airlines 75). The company plays a major role in shaping the future of the air transport industry. Given the associated dangers of terrorism in the Middle East, the airline airport surveillance and security is high...
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...We are a company that set out to be the most competitive company in the airline industry, whose plan was to take advantage of specific areas in the short-haul domestic travel market. The existence of low cost service and the demand for passenger travel on selected routes indicate that a new entrant airline could be expected to capture a significant portion of current air travel business .News Airlines, which stands for North, East, West, and south, we choose the name to express our routes, out destinations and what we stand for, which is considered to be a normal market. News Airlines mission statement is to meet expectations of customers and employees, as well as, providing a safe customer oriented air transportation environment. We specialize in, efficient, friendly, and prompt service. We are committed to meeting the expectations of valued customers. Our motto is Customer Service business and focus. What we hope to accomplish is to provide airline transportation to individuals, throughout the United States with the highest quality of air service. Our goal is to have the widest selection of destinations possible, while we are modernizing our fleet and maintaining our position as the largest air carrier in the industry. In our decision-making we struggled with strategizing and making decisions that would keep us from loosing. We tried coming up with is to become the most profitable airline, which we emphasize on providing competitive rates for all customers. Striving...
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...JetBlue Airways: Managing Growth Chathura Wathuge 103739845 75-498-02 Problem Airline industry is a highly unpredictable industry with much complexity. The main problem JetBlue is facing is how to manage its growth with the unpredictable nature of the industry and high expenses in the industry. Another issue is how to handle the complications that arise from the introduction of the new E190 planes. The CEO, David Barger must decide on the best way to slow down the capacity growth of the airlines, so that the company won't grow itself to death. External Environment Industry The airline industry is a part of the overall transportation industry and it encompasses of low-cost carriers (LCC) and legacy carriers. JetBlue mainly compete in the category of low-cost carriers and it conducts both domestic and regional operations. It is a very competitive industry to enter or exit because of the expensive nature of the industry. A firm that tries to enter the industry will have to make substantial capital investments in order to compete in the industry Key Success Factors * Cost leadership - Cost leadership in this industry is vital. By obtaining cost leadership, an airline is able to offer its customers lower rates. * Customer service - Offering an excellent customer service is crucial in the airline industry. This also includes trying to accommodate all customer needs and wants, in relation to his/her travel requirements. * Employee relations - A firm's human...
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...Southwest Airlines Kaushal Desai Vaishali Patel Debra Quach Introduction Although the airline industry is no longer experiencing the rapid growth it exhibited before 1990; commercial air travel in the U.S. remains the preferred method of transportation for a majority of Americans due to cost-effectiveness and timesaving characteristics. From 1980 to 1990 the number of passengers traveling by air increased by approximately 72%, in contrast, in the 1990-1998 period, the airline industry only experienced 36% growth. Furthermore, during 1965-1978, the government regulated the airline industry by forcing artificial wage increases and artificial price levels. In the postderegulation era, labor negotiations were the cause of many labor strikes. The big carriers have tried to cut costs, but have been constrained by strong union opposition. For example, “Unions have fought against moves to shift unprofitable routes to lower cost regional jets with lower paid pilots.” Confronted with cut-throat competition, particularly from low-cost rivals such as Southwest, now America's fourth largest carrier in terms of traffic flown, the big airlines have found themselves caught traditional fare wars that cut into their already slim profit margins. The domestic airline industry in the United States is characterized by intense rivalry and low profit margins. Through product differentiation and a strategy of low cost and no frills, Southwest has been successful in distinguishing itself from its...
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...Submission Southwest Airlines Evaluation Introduction Southwest Airlines is a unique short-haul airline operating in United States with its headquarters in Dallas, Texas. It was started nearly three decades ago, and it has been considered as model as a model for the industry. It was started in 1967, but started flying in 1971 following successful court battle from competitors who argued against its entry into the market (Doganis 124). Southwest airlines have come along way as low-fair airline managing to compete fairly with its larger competitors. The airline has managed to survive three decades of cut-throat competition by concentrating on offering short sectors. This sector targets at offering low unrestricted fares, excellent online departure, and high point-to-point frequencies. Its strategies targeted at diverting passengers from ground transport to air transport. This paper will evaluate the success of Southwest airlines in relation to its financial control, financial planning, management of costs and effectiveness of its decision making process. Evaluation of Southwest Airlines Success Factors Right from its inception into the airline market, Southwest airlines have been very keen on its financial planning especially with regard to operating at costs that are consistently below its revenues. Despite the fact that its unit revenues are not below those of its competitors, it has managed to operate at cost levels that are 25-40 % lower (Doganis 132). The airline focuses on planning...
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...Southwest Airlines 1. Why has Southwest Airlines been so much more successful than its competitors? After initially reading this case study on Southwest Airlines, I have come to the conclusion that Southwest Airlines is a very successful company. Southwest Airlines prides themselves in customer satisfaction. There first goal is making sure the customers are completely satisfied. They made flying more of a joy than a chore. There was no first class, no assigned seating, and this cut down on time. Southwest also offered low fares, almost 60% lower for coach fares than other airlines. Employees were also an integral part of the airlines success. Southwest made sure that their employees are more to the company than just workers. Southwest wanted to make sure that they were hiring people that best represented the company’s mission. In doing so, they hired staff with positive personalities and a sense of humor. These employees were paid wages that were in direct competition with other airlines, they were also offered to participate in the airline’s profit-sharing as well as stock ownership programs. 2. How has the original strategy been altered in recent years? How, if at all, have these changes affected Southwest's key success factors? Since its inception in 1967, few things have changed. The airline has now expanded its routes. Southwest is now flying to more cities than when it was first created. Southwest has also stopped the “open seating” policy and has now...
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...Cathay Pacific [Case Analysis] Due to substantial deregulation of the airline industry in the 1980s, a highly competitive environment arose for airline carriers. Cathay Pacific, for one, was particularly efficient in making the most of this new environment, and this is largely attributable to how the airline has managed its IT operations. By outsourcing (mainly non-strategic) functions that were not core competencies, for example, they did not only cut down on costs but they also effectively reduced risks. So as the airline continued to grow, it rigorously transitioned from “strictly building and operating to acquiring and managing.” Facilitated by its global linkages, Cathay Pacific now found itself in a better position to identify key suppliers and infrastructure. This new stance allowed the airline to narrow searches down to optimal combinations of suppliers that remained competitive. Although this would later become a hindrance, as newfound partners would hold “partner” statuses that made it difficult for the airline to issue standard requests for pricing, it had an overall significant effect that put the company in a stronger position to compete. Cathay, did however, eventually replace the “smart-sourcing” strategy around 2004, when the new theme of corporate purchasing process was competition. smartsourcing: Under this new strategy, the airline focused on using fewer and longer-term suppliers that consistently demonstrated flexibility and competitiveness...
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...Summary Delta airline has a long history whose roots begin at the year 1924.This airline has grown to become one of the largest airlines serving the United States of America and also majority of the world through its international routes. The aim of this paper is to see the history of the airline together with its financial position with concentration on the various strategies the company has implemented to reach where it is right now. The paper will also include various suggestions to the airline to help it to grow further. Delta airlines began in the year 1924 but during that time it was known as Huff Daland Dusters. This was the first aerial crop dusting which had its headquarters in Georgia. The following year, the company moved its headquarters to Louisiana. The directors of the company were B.R Coad and Collett Woolman.Huff Daland went on its first international route and that was to begin its services in Peru which brought in enough money and increase in purchasing power. The year 1928 gave birth to what is known as Delta Airlines today. Furthermore, the year 1930 came with a major setback to the airline. Delta failed to secure a commercial airmail contract and therefore suffered major losses which forced the airline to suspend passenger service. As time went by, the year 1934 seemed to be the year for Delta Airlines as they secured a low-bid contract for the new Route 33 airmail service between Dallas and Charleston, South Carolina, via Atlanta .The airline also resumed...
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...CRISIS MUST BRING CHANGE IN THE AIRLINES INDUSTRY IN MALAYSIA. INTRODUCTION Airline can be described as provide air traffic services to passenger from origin to destination. Airlines also can be known as oligopoly market structure. This is because only few firms that involve in producing similar or differentiated product, that is air traffic services. Many characteristic or factor that make airline as oligopoly market structure and ca n be categorized as high barrier to entries. Because of that, small factor can be easily affect and bring the airline into crisis. The industry generates substantial cash flow to repay debt and buy new airplanes, which, like most tangible goods, depreciate over time. The industry also is distinguished by the amount of time and effort which must be concentrated on customer service, requiring a high amount of labour. More than one third of airlines’ revenue is consumed by the industry’s work force. Revenue from aircraft industry can be simplified as from sources such as passengers (75 percent), cargo shippers (15 percent) and other transport services. About 80 percent of passenger revenue comes from domestic tickets, while frequent flyers, which travel more than 10 times annually, constitute about 40 percent of trips but only 8 percent of the total flying public. What is ‘crisis’? A crisis is any event that is, or expected to lead to, an unstable and dangerous situation affecting an individual, group, community or whole society. Crises are...
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...Northeastern Airlines University of Houston-Downtown Executive summary With time however the budget practices of airlines will attain a baseline need more so with continuity of non-efficient costs rising with increased regulatory pressure as well as increased consumer demands. As such, airlines that operate on a business model that entail budget practices will possess the strongest opportunity to attain an advantage that is competitive in the future of a curve of sustainability that is emerging. The other benefit entails retention of the existing aircraft as identification of the employee is the most substantial benefit of undertaking budget policies. This is because existing aircraft in the same regard as clients in the airline’s usage increased sophistication and tuning towards present thinking within society since guests show more likelihood to identify with an employer whose operates according to principles and practices within aligned values. Minimum-cost spanning tree The pattern is based on the application of Prim’s algorithm. The commencement point is at node 3. At any of the iteration, the set S reflecting the nodes where the edges that have been selected are incident and are is emphasized in red. The partial spanning tree has been reflected in light green. Amidst all the edges in the cut δ(S), that has been induced by S, the edge, among those of the least minimum cost, which shall be added to the partial spanning tree shall be reflected as...
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...qualifications and their effect on decision making process in airline MRO service organizations Viviana A. Martin Embry-Riddle Aeronautical University Abstract The trend of selecting or promoting managers that do not have direct experience in the areas they manage in technical positions appears to be taking place in many companies today including airline MRO services organizations. In order to be successful in a competitive marketplace, management must make effective decisions to maximize the output of their organization, minimize waste and mistakes, and keep morale up. As such, it is imperative to understand which ‘type’ of manager should be placed in each management role; an effective leader that may not have intimate knowledge of the area they manage, or a manager that fully understands the inner workings of the organization that may not be as effective of a leader. This paper seeks to examine management qualifications and their effect in the decision making process and how that impacts organizations. This paper also reviews both decision making in airline services organizations and management types to provide an understanding of the decision making process and factors that can affect that process in airline MRO services organizations. Keywords: organizational behavior, decision making, technical management, general management. Managers without enough qualifications and their effect on decision making process in airline MRO services organizations Introduction Nooraie...
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...Classic Airlines and Marketing Solution Your Name Here MKT/571 December 12, 2012 Instructor Stuart Ringer Introduction The standard method for solving a problem primarily will involve defining the problem, understanding the problem in relation to the current developments, and assessing what in fact needs to change. In the case of Classic Airlines, budget restrictions, decreased sales, low employee morale, diminished customer satisfaction, and the need to cut costs are the issues that plague the organization. According to the University of Phoenix (2012), Classic Airlines has experienced a decrease in stock prices due to limited consumer assurance, rising costs of labor and fuel. In searching for solutions, this paper will employ an aggressive nine step process of defining the problem to achieve the recommended marketing solution that includes the following steps: 1) define the situation or problem; 2) frame the right problem and measure the levels of current performance; 3) describe the end-state goals that will provide direction and vision to help management make the appropriate choice; 4) identification of alternatives that determine root causes and determine the reasons the process is working or not working appropriately; 5) evaluation of alternatives and select the best strategy to solve the problem; 6) identify and assess risks; 7) making a decision; 8) develop and implement solution and appropriate changes in the process; 9) evaluation of results to stay committed...
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...(Boeing, 2010). In the early 2000s Boeing struggled and was surpassed by Airbus in annual airline sales. Through the organizing function of management, Boeing is once again the leader in the aerospace industry, continues to build a competitive advantage, and is more flexible, innovative, efficient, and responsive to its customers. The organizing function of management follows the planning function and requires management to develop and organizational structure, assemble and coordinate the human, financial, physical, informational, technological, and other resources needed to achieve the organizations goals. To be effective, managers need to use new forms of organizing and possibly view people as the most valuable resource. Companies will departmentalize an organization during this function of management. Examples of departmentalizing an organization include organizing by function, product, geography, or customer. Although the organizing function of management consists of assembling and allocating the resources needed to achieve goals, organizing is also about utilizing resources to build a dynamic organization (Bateman & Snell, 2009). A key resource to the organizing function management is human resources, which involves maximizing the capabilities and performance of the organizations people (McNamara, 2011). For Boeing to regain its elite status, the company began making plans to...
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...Linda Newman Bus 599 Dr. Romuel “Roy” B. Nafarrete Discuss the trends in the U.S. airline industry and how these trends might impact a company’s strategy. The U.S. airlines is started to see improvement demand for air travel in beginning 2010 after being affected by the economic downturn. Business travel, is directly affected by economic environment, to an all time low 2009 as many corporations slashed their travel budget (www.jetblueairway.com). The airline industry is facing most difficult times in history. There was a worldwide recession with terrorist attack September 11, 2001 that led to decrease in passenger traffic, reduction in revenue and rising fuel prices. Following the September 11 attack, the president signed into law the stabilization act which provided compensation to U.S. Passengers, and cargo for losses that incurred by the airline industry as a result of terrorist attack(www.jetblue.com). Passenger’s confidence in air travel was damage greatly after the 911 attack. Airlines were forced to cutback on flight and reschedule existing routes, and forced to charge for extra baggage Consumers are constantly searching for ways to save money, and the airlines industry has tried to adjust to the increasing demand and by cutting and controlling costs (Thompson, Strickland, Gamble, 2009.pg c-53). David Neeleman founded jet Blue, after working for two other airlines (Morris Air and Southwest) in which he was not satisfied with their way of doing business to...
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