...Executive Summary – American Airlines The future of American Airlines remains uncertain after a lieu of mistakes and misfortunes. American Airlines’ parent company, AMR, filed Chapter 11 bankruptcy in November of last year after recording net losses of $2.1 billion, $1.5 billion, and $471 million in 2008, 2009, and 2010 respectively. Also, with AMR’s previous CEO declaring retirement, new CEO Tom Horton was named. In the wake of their financial predicament, American Airlines is also having PR, managerial, and maintenance problems. The pilot union is demanding an industry standard contract that includes salary and job security provisions. The inability of AA to negotiate a deal, along with thousands of job cuts, has left many American Airlines’ employees bitter. In recent months, flight attendants have engaged in very inappropriate public rants and rude behavior consequently causing delays among flights and irate customers. In addition to the behavioral issues, several planes have had to make emergency landings due to loose seats and other incidents of insufficient inspection. In July, five AA passengers had to be hospitalized after encountering turbulence during a flight. American Airlines’ fleet of aircrafts has an average age of 15 years. These aged carriers are inefficient energy consumers and multiply costs. American Airlines has openly declared their opposition to a merger with US Airways, although, the final decision rests with AMR and negotiations are still in progress...
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...Antitrust Laws After much research and investigations on Antitrust Laws, and reading up on individual cases, I think that overall Antitrust Laws are effective and good for the people. Without the Sherman, Clayton, and Federal Trade Commission Act, there would be a monopoly of every industry, trade, marketing, and services. This would in-turn lead to higher prices for the consumer, lower quality products, less innovation, and poor service. As I mentioned in my opening sentence, I will bring up two individual cases that the DOJ (Department of Justice) is pursuing when it comes to Antitrust Laws. I would like to begin by quoting the DOJ’s mission statement. Mission “The mission of the Antitrust Division is to promote economic competition through enforcing and providing guidance on antitrust laws and principles. Antitrust Laws The goal of the antitrust laws is to protect economic freedom and opportunity by promoting free and fair competition in the marketplace. Competition in a free market benefits American consumers through lower prices, better quality and greater choice. Competition provides businesses the opportunity to compete on price and quality, in an open market and on a level playing field, unhampered by anticompetitive restraints. Competition also tests and hardens American companies at home, the better to succeed abroad. Federal antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution...
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...Case 2 - Baggage Complaints: Descriptive Statistics and Time Series Plots Baggage Complaints: Descriptive Statistics and Time Series Plots Background Anyone who travels by air knows that occasional problems are inevitable. Flights can be delayed or cancelled due to weather conditions, mechanical problems, or labor strikes, and baggage can be lost, delayed, damaged, or pilfered. Given that many airlines are now charging for bags, issues with baggage are particularly annoying. Baggage problems can have a serious impact on customer loyalty, and can be costly to the airlines (airlines often have to deliver bags). Air carriers report flight delays, cancellations, overbookings, late arrivals, baggage complaints, and other operating statistics to the U.S. government, which compiles the data and reports it to the public. The Task Do some airlines do a better job of handling baggage? Compare the baggage complaints for three airlines: American Eagle, Hawaiian, and United. Which airline has the best record? The worst? Are complaints getting better or worse over time? Are there other factors, such as destinations, seasonal effects or the volume of travelers that affect baggage performance? The Data Baggage Complaints.jmp The data set contains monthly observations from 2004 to 2010 for United Airlines, American Eagle, and Hawaiian Airlines. The variables in the data set include: Baggage Scheduled Cancelled Enplaned The total number of passenger complaints for theft of...
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...implement plans. • Planning - is the process of setting objectives and determining how to accomplish them. • Controlling - is the process of measuring performance and taking action to ensure desired result. • Leading - is the process of arousing enthusiasm and directing efforts towards organisational goals. In case study one; we can see that Robert L. Crandall was successful as he sat through various managerial levels at different organisation. One of his keys to success was through his ability in the area of management where he shown the four basic managerial functions. He was well known for his time at the American Airlines. Under his leadership, American Airlines was transformed from a small domestic carrier to one of the world's leading airlines with the largest jet fleet worldwide. American led the airline industry in the 1990's in revenues and operating income, and its parent company, AMR Corporation, was one of the top Fortune 500 companies. Organising In this case study one, organising was the managerial functions Crandall perform the most as it was one of his strongest points. His greatest contribution to the success of American Airlines was his vision in propelling the SABRE (semiautomatic business research environment) Group from an internal division of the company to one of the world's largest, privately owned computer networks. During his leadership, he introduces the Super Saver Fares. These were greatly reduced fares available only for reservations...
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...------------------------------------------------- American airlines leadership American Airlines Leadership American Airlines has a very unique history being the first “major airline” in the United States. The original name of the company was American Airways, which was conceived through the acquisition of 80 different airlines in 1930. The smaller airlines that were acquired included, Southern Air Transport in Texas, Southern Air Fast Express (SAFE) in the western United States, Universal Aviation in the Midwest, amongst a few others. With the airlines working under one name they were able to provide a much simpler way to travel and like many early carriers then, American earned it’s the most by carrying U.S. Mail. By 1933 American Airways operated a transcontinental route network serving 72 cities. In 1934 American Airlines was created by E.L. Cord who acquired American Airways and renamed it. The new owner, E.L Cord, hired C. R. Smith a Texas businessman. Smith began to work Donald Douglas in a project where they would pioneer a new phase of airline industry. Smith and Douglas worked and developed the DC-3, exclusively for American Airlines. This new plane was known as the flagships and the American Airlines’ DC-3 allowed for the company to be made the first airline to be able to operate a route that could earn a profit solely by transporting passengers, instead of relying solely in mail transportation. American Airlines was not only the first to profit from passengers...
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...American Airlines Strategic Report for American Airlines Jed Cullen Kevin Yamazaki Deirdre Chew April 7, 2010 April 7, 2010 Page 1 American Airlines Table of Contents Executive Summary ............................................................................................ 3 Company History................................................................................................. 4 Financial Analysis ............................................................................................... 8 Current Financial Position.................................................................................. 8 Industry Comparable Analysis ......................................................................... 12 Stock Performance .......................................................................................... 14 Management and Analyst Outlook................................................................... 15 Competitive Analysis ........................................................................................ 16 Internal Rivalry ................................................................................................. 17 Supplier Power ................................................................................................ 18 Buyer Power .................................................................................................... 19 Entry and Exit ..............
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...Che Guevarra Labor Laws and Unions American Airlines Background American Airlines (AA) history goes back to 1926 when a young aviator named Charles A. Lindberg started air routes to transport mail between St. Louis to Chicago. Lindberg seek the help of other aviators and expanded to other types of types of services such as transport of foods. Later on under the name of American Airways, Lindberg acquired and organized other small airlines. The small airlines were mostly independent carries and they all were branded under American Airways. Throughout the decades AA participated in the development of our current mail systems and play important parts in the American conflicts such as World War II, where AA turned their fleet to the military, Air Transport Command, to include their air crews. AA has been always been reinventing itself offering new services, keeping itself with aviation technology and by introducing new customer services. It innovated with services like magnetronic reservoir to keep track of available seats. AA was the first to offer nonstop transcontinental service and later on the first to offer coast-to-coast jet service. They also introduced a Family Plan to give discount air fares to traveling families. AA attention to customer service introduces the first flight attendant college and the AADVANTAGE travel awards program. AA was the first airline to use electronic ticketing and it was one of the first airlines to go use online ticketing. Currently, AA...
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...Marketing Plan Tabitha Blount, John Greene, Nicole Noe, Marva Weeks and Tracey Ysordia MKT/421 September 30, 2013 Dr. Michael E. Ricco MBA, DBA Introduction In 1930, American Airways was first founded and had flights from their hub in Dallas to Boston, Chicago, New York and Los Angeles. American Airlines Inc., formerly known as American Airways, is a US airline owned by AMR Corporation. As one of the leading airlines in the United States, their available flight routes are both domestic and international. In February 2013, American Airlines and US Airways announced plans to merge, which would create the largest airline in the world. The combined airline is set to carry the American Airlines name and branding; the new publicly traded holding company will be named American Airlines Group Inc (American Airlines, Inc, 2008). With the merging of the airlines, American Airlines is looking to the future for continued profitability and to continue success with customer satisfaction. Description of New Service American Airlines, Inc. will introduce the AirPad and also the AirPad, Jr. The new product lines will be available on all flights. The rentals are free for Business Class travelers and those in coach will be charged a $15 or $10 if they reserve in advance. The AirPad product lines will have access to a large selection of movies, television shows, interactive and kid friendly games. They will also offer a variety of magazines and books that can be rented during the flight...
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...Refer to the discussion of the New York-San Juan pricing decision in the case. What additional information should Doug Santoni collect to decide on a response to Eastern's pricing initiative? In response to Eastern’s pricing initiative, Doug Santoni should collect several bits of information before deciding on an appropriate rejoinder. First, he should know the volume of the passengers that travel along this route, for both American Airlines, and it’s main competitors, Eastern and TWA. This will allow him to make the correct downstream calculations such as changes in revenue, profits/losses, and capacity along the New York-San Juan route. A breakdown of the busiest times/routes (for all airlines, but especially American) would be useful to determine which flights need to be targeted, if any, with a response. Most of the other information Doug should collect relates to the makeup of the passenger types. How many passengers are traveling for business versus pleasure? Knowing this could again help predict capacity and revenue changes. While the makeup is divided fairly evenly into three categories (business, leisure, and locals), what is their specific makeup during the peak and slow seasons? The latter is when Eastern has tended to target with low one-way fares in the past, and it would be good to know who purchases those tickets at the time. If the low point is coming from a slow in leisure and/or local passengers, a price drop may be needed to increase passenger...
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...RUNNING HEAD: THE AIRLINE INDUSTRY The Airline Industry Name College Table of contents Abstract 3 Introduction: 4 Products and services: 4 Organization: 4 Major players in the airline industry: 5 Economic impact of the airline industry: 8 Employment within the industry: 9 Key trends in the airline industry: 9 - Economic forces: 9 - Technological forces: 11 - Socio-cultural forces and political-legal forces / Government Regulations 13 Logistics and supply chain factors 14 Porter’s Five Forces Analysis: 16 Strategies used by airlines: 17 Expected Entrants: 18 Conclusion and Recommendations: 18 List of Abbreviations 20 Appendix: 20 References 21 Abstract The US airline industry is one of the key sectors of the country’s economy. Employing over ten million people, it contributes up to half a trillion dollars in annual revenues (about 5% of the US GDP). In recent years, the industry has been faced with major challenges arising from its external environment. Some of these include rising fuel prices and the global economic recession. As a result, growth in the industry has significantly slowed down with the ATA estimating that by the end of 2008 the industry had lost between $9 and $24 billion. With high intensity of industry rivalry, high supplier bargaining power, low threat from new entrants, low threat of substitution, and low buyer bargaining power; the industry’s attractiveness can be described as moderate. To be successful...
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...THE AIRLINE INDUSTRY is in deep crisis. Losing over 100,000 jobs since September 11, 2001, and suffering major wage and benefit cuts, workers are in shock and looking for new leadership. The recent U.S. invasion and occupation of Iraq, the outbreak of the SARS epidemic and the economic downturn exacerbate the impact of the crisis on labor. Airline workers are in the forefront of discussions about their own industry and more general questions as political and social consciousness changes under the impact of the restructuring crisis. These experiences are valuable for all workers. While 9/11 and subsequent events greatly worsened the crisis, the dire state of this industry pre-dated the 9/11 attacks. The major carriers were losing millions of dollars and facing possible bankruptcy filings because of broken business models that were no longer profitable. In the capitalist system that generally means businesses fold. Bankruptcy as a Weapon Government aid still flows to the airlines, as it did after 9/11. But Wall Street and Washington are pushing the restructuring process. Meanwhile some important facts indicate the depth of the crisis and the challenge facing rank-and-file workers and their unions. Last summer US Airways, the seventh largest carrier, filed for bankruptcy and began slashing jobs, wages and benefits. It emerged from bankruptcy in the spring as a smaller carrier with lower labor costs than most of its competitors, but US Airways is still not out of turbulent...
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...on flight: Southwest Airlines allows customers to carry small pets (cats and dogs only) on board all domestic Southwest Airlines flights. All in-cabin pets must be carried in an appropriate pet carrier. The pet fee is $95 each way per pet carrier. Each customer is limited to carrying one pet carrier on board. The carrier may contain up to two cats or dogs of the same species. The carrier will count as the customer’s carry-on bag. Southwest does not require a health certificate or any other documentation from the customer’s veterinarian for pets to travel. Pets are not permitted on international flights. Other several airlines carriers also allow pets on board, like United, Delta, American and US Airways, put the advantage of southwest airlines that is less expensive than its competitors, southwest airlines charge 95$ for one pet carrier, other mentioned airlines are charging a 125$ for one pet carrier. - Cashless cabin: Southwest airlines applied the cashless cabin technique to all of its units, this technique helped improving consumer’s goodwill, a traditional scenario that irritates consumers usually, buying 5$ juice and give the flight attendant a 20$ note, and wait half an hour for the change to come back. Also, this technique saved the time and reduced the jam on atm machines at airports, because travelers can dispense cash if buying items with credit card is possible. But southwest airlines is not alone, American Airlines, United Airlines, AirTran and JetBlue cabins...
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...Oil and American Tobacco have been dismantled through anti-trust laws. In addition, the antitrust laws prohibit price fixing between competitors. In 1934, Boeing became a large enterprise, producing aircraft engines, carrying mail, dealing with airports and ensuring many airlines. But under pressure from anti-trust law prohibiting manufacturers to operate airlines, its creators sold their holdings and "United Aircraft and Transport" got divided into three entities: * United Airlines responsible for air transport * United Aircraft responsible for manufacturing in the East * Boeing Airplane Company responsible for manufacturing in Western countries. United Aircraft and Transport Corporation is a vertically integrated group, present in all sectors of aviation. In 1934, an anti-trust law is to separate aircraft manufacturers companies carrying mail, and forces the company to split into three entities, * United Air Lines in 2011, which is the largest airline in the world * United Aircraft Manufacturing Corporation, which later became the United Technologies Corporation * Boeing Airplane Company, which became in 1941 The Boeing Company. Case example of Air France / KLM In September 2003, it was announced by Air France and KLM that they would merge their ownership and begin synchronizing operations, although they would continue to be supposedly separate carriers. This blend of two of Europe's largest four carriers created the world's largest airline, as considered...
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...Kacie R. Logan Row 3 MGT 487 Sec 009 SWA case Status Analysis Southwest Airlines is a true American success story. In 1971, they began as a small company which was only able to service Dallas, Houston, and San Antonio, Texas. They have come from being a small operation consisting of only three airplanes in three cities to being one of the largest airlines in the United States operating 530 aircraft1 across 32 states2. In the past, their success has been directly tied to their commitment to customer service. Southwest Airlines, hereafter SWA, mainly competes with United, American, and Delta airlines; however, AirTran and JetBlue have also caught their attention3. The biggest competitive advantage possessed by SWA lies within their treatment of their customers. Every aspect of the company is geared towards taking care of their passengers’ needs. Through SWA, people have the ability to fly inexpensively to the places they need and want to go. Southwest Airlines has been able to keep their own costs low by flying short-haul routes, fuel hedging, uniformity among the aircraft, and the automation of many jobs. SWOT Analysis The biggest strength of SWA most definitely lies within their dedication to take care of people. The customers and profits are not the only concerns that SWA cares about. They have an extremely tight-knit culture within the company itself. The bulk of the company’s financial success is directly credited to the employees who help make the...
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...MBA 610 Case Study: Southwest Airlines Corporation 1. Southwest Airlines Corporation is an extremely popular and profitable company due to their strategy of being the nations’ low-fare, high customer satisfaction airline. Southwest is able to offer the nation’s lowest fares due in part to their low operating-cost structure, the lowest in the domestic airline industry. This low operating-cost structure (refer to Exhibit 1 for 5 year financial highlights and 2004 data) is the basis on which Southwest builds its competitive advantage, as it allows Southwest to sell low fare tickets while still enjoying a gross margin percentage of sales (29.2% of sales in 2004) much higher than United Airlines (22.7% of sales), American Airlines (1.9% of sales), and Delta Airlines (18.9% of sales). Southwest achieved this low cost operating structure through eschewing the traditional “hub-and-spoke” approach used by their competitors, and instead flying short haul, medium haul, and point-to-point flights, allowing for more frequent flights. As a result, about 80% of Southwest’s passengers fly non-stop and the overall passenger length is approximately 758 miles. Additionally, Southwest consistently seeks out ways to improve its efficiencies and low cost structure. For an example, at Southwest, turnaround time (from the time a plane lands until it is ready for takeoff) takes approximately 20-25 minutes and requires a ground crew of four plus two people at the gate. By comparison, turnaround times...
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