...Management\Air Berlin Case essay Executive summary Airline industry has been faced with stiff competition due to the increased number of airline companies in the sector. The study will focus on the strategies that are deployed by Ryanair Airline Company, Air Berlin Company and Easy jet plc in ensuring that it meets with the competitiveness in the economy. The strategies for Ryanair Airline include; Low fare, Best Customer service, Short-haul route and destination, Reduction of operating costs, Internet services in its reservation system and Quality management. In the case of Air Berlin airline its strategies comprises of high service standards, blanket coverage, market positioning and segmentation, ticket booking, low price considerations, flight connections and safety of the passengers and staff and the overall efficiency in its operations. Easy jet plc articulates to its long term strategies which are customer service and safety, fare structure is simplified; unit costs are minimized, strong branding, articulation of multi-base network and strong corporate culture in the organization. Air Berlin company need for IPO is highlighted and the reasons for its decision to go public. Calculation of the NPV for the company is provided which necessitates in the determination of the share value of its initial public offer. Ryanair airline strategies Ryanair airline wants to resolutely establish itself as the leading airline industry in Europe. The company is facing stiff competition...
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...China Airlines Ltd. SWOT Analysis SWOT Analysis examines the company’s, key business structure and operations, history and products and provides summary an analysis of its key revenue lines and strategy. China Airlines (CAL) is principally engaged in the provision of airline services. The company offers two major services, passenger transport and cargo transport. The company operates flights to 89 cities in 29 countries. It is headquartered in Taipei, Taiwan and employs more than 10.000 people. This report provides all the important information on China Airlines Ltd. and contains a study of the major internal and external factors affecting China Airlines Ltd. in the form of a SWOT analysis. Strengths 1. Fleet age: The average age of their fleet was only 5.6 years, making it one of the youngest and most updated fleet in the world. Their products such as their aircrafts, services and flight networks are more superior to those of Chinese counterparts. 2. Joint Venture: CAL entered a joint venture with Koos Development Corporation to form Mandarin airline in 1991, so that the airline could carry out services to Canada and Australia where CAL itself was directly banned from operating. 3. Branding: By rebranding the Airline with the Taiwanese flag and slogan “blossom everyday” CAL gained new entry to European countries like Amsterdam, Rome, Frankfurt and Vienne. 4. Aviation Market: In 2007 CAL captures one 4th of the aviation market in Taiwan making it the country’s biggest...
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...Introduction 2 II. Market Structure 4 III. Industry Demand 5 IV. Cost Structure 6 V. Analysis of Competitive Forces (Porter’s Five Forces) 9 a) The Threat of Entry by New Competitors 9 b) The Intensity of Rivalry among Existing Competitors 10 c) Pressure from Substitute Products 11 d) The Bargaining Power of Buyers 11 e) The Bargaining Power of Suppliers 12 VI. Conclusion 12 VII. References 14 VIII. Appendices 16 | Executive Summary Due to the necessity of the services the Airline industry provide, its relevance has increased tremendously over the years, this relevance has induced higher demand and higher expectations in the industry. Thus, entering this industry comes with a big price, the cost associated with airline industry are enormous and with the current fuel and labor cost many airlines are facing their biggest challenge yet, as they all scramble to stay afloat, the pressure to meet passengers demand has never being higher due to the steepness of their demand curve. Airline deregulation was enacted by the government to help ease some of these issues that may arise in this industry, the government saw the need to regulate airline industry prices while still maintaining their services to passengers due to the continuous increase in demand of airline product with no many other options in some cases no other options for passengers. After conducting an evaluation of the airline industry analysis it can be said that most airlines have a driving-force...
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...measure, and mange relationships with each of those customers individually. A forward thinking company must focus on the preserving and increasing the value of that customer base. Organizations like airlines must mange their customer relationships effectively in order to remain competitive. In this case analysis, I will identify and explain key external factors that affect the passenger airline industry. This analysis will then turn towards explaining what the major airline market segments are, by applying segmentation, targeting, and positioning. Finally at the end of this analysis I will contrast two specific airlines United and Delta Airlines and describe each of the company’s target market and positioning by giving some examples of how these strategies are implemented for each company. Key External Factors Companies, like the airline industry, are forced to alter their business models, pricing, revenue, and cost structures to suit their customers’ changing needs in different economic conditions. The airline industry has experienced several modifications in terms of marketing and strategic planning in recent years due to an increase in airline competitiveness. (Gursoy, D., Chen, M-H, & Kim, H. J. 2005.) There are several key external factors that affect the airline industry, which can be broken down into four main categories. The four categories are political and legal factors, economic factors, demographic factors and finally technological and environmental factors...
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...domestic scheduled and charter air services for passengers , cargo and mail. Structure of the company: British Airways is one of the top ten airlines in the world and serves 200 destinations in more than 80 countries. The airline also operates a freight handling centre, Ascentis, which is considered as one of the most advanced freight-handling facilities in the world. Virgin Atlantic Airways Ltd Activities Virgin Atlantic Airways is engaged in the operation of scheduled air services for the carriage of passengers and freight. Structure of the company: Virgin Atlantic was founded in 1984, and is one of UK’s second-largest long-haul carrier airlines serving the world’s major cities. The company’s schedule includes twenty one (21) destinations from its operational centres at Heathrow and Gatwick airports. Global Supply Systems Ltd Activities Global Supply Systems Ltd is a dedicated operation company using only freight aircraft to carry goods without having any dedicated scheduled flights. Structure of the company: The Company is a subsidiary of River Don ltd. Global Supply Systems ltd is majority owned by a British entrepreneur, while Atlas Air inc has a minority shareholding in the company. Channel Express(Air Services ) Ltd Activities The Company operates cargo aircraft on charter contracts in Europe. Structure of the company: The Company was founded in 1987. In February 2003 it commenced as a passenger airline flying daily from Leeds Bradfort International...
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...POSITIONING STRATEGY WITH A NEW IDENTITY: A case study of VIETNAM AIRLINES by Le Hong Dac A research study submitted in partial fulfillment of the requirements for the degree of Master in Business Administration Examination Committee: Dr. Truong Quang (Chairman) Dr. Clemens Bechter Dr. Lalit.M.Johri Nationality: Vietnamese Previous Degree: Bachelor of Economics University of Agriculture and Forestry HoChiMinh City, Vietnam Scholarship Donor: The Government of Switzerland Asian Institute of Technology School of Management Bangkok, Thailand August 1999 Acknowledgement I wish to express my profound gratitude and great appreciation to my advisor Dr. Truong Quang for his valuable guidance, advice and encouragement throughout the research study. Special thanks are extended to the other members of the Examination Committee, Dr. Clemens Bechter and Dr.Lalit.M.Johri for taking interests and giving valuable suggestions to improve the content of this study. Deep appreciation and thanks are also extended to Mr. Luong Hoai Nam, Mr. Trinh Ngoc Thanh, Mr. Duong Tri Thanh, Mr. Mai Quoc Tuan, Mr. Nguyen Thuong Hai, Mrs. Nguyen Thi Minh Yen and Mr. Le Dinh Tuan of Vietnam Airlines Corporation for providing me the desired information and data for this research study. I fall short of words...
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...Title: Low Cost airlines Industry in India An overview of the Indian aircraft industry The Indian economy has grown at an average rate of around 8% in the last decade. The rise in business and leisure travel (both domestic & international) due to this growth, India emerging as a major origin and destination for international travel have all had a significant impact on commercial aviation in India. According to the airports authority of India (AAI), the passenger traffic is expected to grow at over 20% in the next five years. On the supply side, since 2003, when low fare travel in India was ushered in, a number of low cost carriers (LCC) have entered this fast growing market. However, all of the LCC carriers and - with rare exceptions – even the full service carriers (FSC) charging higher fares have been making losses. By and large, operating a commercial airline in India so far has not been a profitable business. In 2007, the industry witnessed a wave of consolidations primarily to stem the tide of red ink. Boom and bust in Indian aviation industry Air India and Indian Airlines retained a monopoly over civil aviation in India till 1992. The deregulation of the Indian economy that started in the mid-1980s, and proceeded more aggressively after the New Economic Policy in 1991, led to calls for opening up of the airline sector. Over the following years, several new airlines including Damania, EastWest, Jet, Sahara, Modiluft and NEPC started operations. However, high...
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... 3. Introduction ..........................................................................................................................................5 Globalization and internationalization ..................................................................................................5 The Basic Features of International Air Transportation .......................................................................6 3.1 Historical perspective ..................................................................................................................6 3.2 The modern industry....................................................................................................................8 4. The effect of globalization on airline markets...
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...THE AIRLINE DEREGULATION EVOLUTION CONTINUES The Southwest Effect [pic] Prepared by: Randall D. Bennett James M. Craun Office of Aviation Analysis U.S. Department of Transportation May 1993 Table of Contents Major Findings 3 Southwest 4 Industry Structural Changes 5 The Southwest Effect 6 The importance of new entrants 8 Appendix A: Charts 10 Chart 1 10 Chart 2 10 Chart 3 11 Chart 4 11 Chart 5 12 Chart 6 12 Chart 7 13 Chart 8 13 Chart 9 14 Chart 10 14 Chart 11 15 Chart 12 16 Chart 13 16 Chart 14 17 Chart 15 17 Chart 16 18 Chart 17 18 Chart 18 19 Chart 19 19 Chart 20 20 Chart 21 20 Chart 22 21 Chart 23 21 Major Findings: The principal driving force behind dramatic fundamental changes that have occurred and will occur in the U.S. airline industry over the next few years is the dramatic growth of low-cost Southwest Airlines: • A return to profitability hinges on developing lower-cost services in short haul markets and increasing fares in longer-haul markets: • Other major airlines are giving up competing with Southwest's low-cost service for market share. Southwest's continuing expansion will force other airlines to bring about a major change in their cost structures by developing new, low-cost services in short-haul...
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...transnational strategy through which the firm looks to achieve both global efficiency and in their home market. The firm has focused on building a shared vision and individual commitment through an integrated network that includes its five business segments, alliances, and partnerships. Lufthansa uses this strategy to continue with their strategic goals regarding its core business activity passenger transportation’s vision to be a top leader at home and across-borders. These networks allow Lufthansa to manage its connections with its customers, suppliers, partners, and alliances at home and globally more efficiently. In addition, it helps to implement value-based and cost saving strategies options in regards to the products and services offered to different markets. Lufthansa’s aim in 2009 was to maintain and expand their position as the leading European quality carrier. In order to succeed the firm has focused on long term growth prospects of securing and building their market position at home then following international expansion. The firm’s position has allowed Lufthansa’s group to choose an international strategy that allows them to act with farsightedness in how to differentiate and customize their services and products to local and global markets by coordinating with their network and ensuring that all members are producing equally high performance within their market place. Although this strategy requires global coordination and flexibility, in regards to the networks...
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...VMOST Vision Mission Southwest Airlines' mission statement reads: "The mission of Southwest Airlines is dedicated to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit." All these traits are what have made Southwest # 1 in fewest customer complaints for several years running. Southwest continues to thrive on its reputation from this # 1 ranking as well as reap monetary rewards that come with this distinction. Southwest’s commitment to their employees reads: “We are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth. Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines. Above all, Employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest Customer” Objectives Strategy The strategy that Southwest Airlines should use in order to continue its success is also based on the “Short-Haul” strategy. The difference is that the strategy must be inter-converted. Southwest can try its best to duplicate its “Short-Haul” strategy globally. For instance, it can do exactly the same business with the same strategy once again. But this time, Southwest has to do it in every part of the world. For instance, Southwest can expand its business in France, Germany, Australia, Russia, China, Japan, Poland, Greece,...
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...Case Study: Economic Analysis of Gogo’s In-flight Wi-Fi November 2, 2015 Introduction Gogo pioneered and now dominates the in-flight Wi-Fi business, which allows passengers to access the Internet during their flights. In recent years, consumers have grown from anticipation to dislike towards Gogo’s services due to its steady increase in fees and rapid decrease in speed. Through a dynamic pricing strategy they hope to relieve congestion which indeed have effect, but will not last in the fierce competition of an oligopoly market structure. Unlike its monopolistic position before, Gogo now faces at least three companies—ViaSat, Global Eagle Entertainment, and Panasonic— swiftly eroding its market share with cheaper and faster in-flight Wi-Fi services using satellites instead of antennas. Gogo’s own next-generation technology 2Ku, to come online in 2016, uses satellites that hopefully would achieve better prices with higher speed. To analyze the market for in-flight Wi-Fi and the pricing strategies of Gogo, our paper will discuss five core areas: The price elasticity of demand for Gogo’s service, and how it varies with price levels The market structure Gogo is operating in Its dynamic pricing How the demand for in-flight Wi-Fi has changed over time, technological changes over the past 15-20 years that has affected demand Technological factors that affect supply, how congestion affects pricing and our recommendation Price Elasticity of Demand...
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...AIRLINE INDUSTRY A STUDY ECO 203 NYC ROSA MARIA MAGPANTAY, RN, BSN, CCRN INTRODUCTION Since the inception of flight in 1903, air travel industry has been a crucial means of transportation for people and products. The invention of the first aircraft hundred-plus years ago brought about a revolution of how people travel. It has been a dynamically changing industry. Air travel remains a large and growing industry. It facilitates world trade, economic growth, tourism and international investment, and is therefore central to the globalization of many other industries. This paper will discuss the characteristics of airline industry in the United States with more focus on passenger airlines, its market structure and competitive environment, market shares and profits, recent developments, technology and innovation, and the future of the industry. U.S. AIRLINES The airlines are classified in many ways. It can be classified based on their size, revenue, and what they transport. The most common classifications are major passenger airlines, low-cost carriers, airfreight, and regional or commuter carriers. As of December 2014, there were 18 major carriers, which defined by the United States Department of Transportation as an airline that posts more than $1 billion in revenue during a fiscal year. Eleven of which are mainline passenger airlines, four are freight carriers, and three regional airlines. The mainline passenger airlines are Alaska Airlines, American Airlines...
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...“Turkish Airlines experiences rapid expansion”. This is the title of an article appeared on November 14, 2013 in the Financial Times. In the decade 2003-2013 the company expanded enormously, from 65 to 233 aircrafts, the passenger numbers have more than quadrupled and the number of international destinations grew surprisingly from 76 to 199. (See Exhibit 1) At present, Turkish Airlines appears to be one of the most extensive airline companies with 106 connected countries (the last was added in April 2014). It was also acclaimed as the best European company in the last four years consecutively at the Skytrax World Airline Awards, being the third most profitable carrier after Ryanair and Easyjet. The expansion continues: with the project of the third Istanbul’s international airport and the announcements of new destinations to countries like Mexico, Philippines and South Sudan. (See Exhibit 2) How a small Turkish state-owned company became so huge and successful? What are the main challenges it had to face and how did it tackle them? What are the main actual and future issues for a company that is expanding quickly and widely? We will try to give an answer to these questions in the paper: starting from an essential and short presentation of Turkish Airlines historical evolution, making a synthetic overview of its main strategies and analyzing the past and the future challenges in developing countries such as India. Turkish Airline historical steps towards internationalization...
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...that extent through over 20 countries. There are some companies which link with AirAsia such as AirAsia X, Thai AirAsia, Philippines’ AirAsia Inc., AirAsia Japan and Indonesia. In addition, for the vision part in AirAsia, AirAsia aims to be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and high fares. While for the mission of AirAsia, AirAsia wants to be the best airline company to work whereby employees are treated as part of the big family. Besides, AirAsia try to maintain the lowest cost hence everyone can fly with AirAsia. Highest quality product, embracing technology to lower the cost and improvement in service levels will be maintained by the AirAsia airline also. Lastly, create a globally recognized ASEAN brand will be the mission part of AirAsia. In the values part, AirAsia will implement trough the following key strategies which are: * Safety * Low fare, no frills * Lean distribution system * Point to point network * High aircraft utilization * Streamline operation The loyalty programmed of AirAsia will be “BIG”. BIG was known as the kind global programmed where can earn BIG Points to redeem “free airline flight”. Members can enjoy the preference booking, special offers and discount as an AirAsia BIG dedication member in term and condition apply. (AirAsia, 2013) 2.0 Strategic Analysis Strategy analysis was known as the process of developing strategy for...
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