...WHY CONTINENTAL: A $385 million loss for the final months of fiscal year 1994 signalled Continental might go bankrupt. Continental was in dire straits because the deregulation of the commercial airline industry in 1978 ushered in a new era focused on mergers and acquisitions and bitter employee-management relations. Venerable airline brands with a commitment to quality, like Continental, were prime takeover targets. After Texas Air Chairman Frank Lorenzo (HBS 1963) secured Continental in his hostile takeover bid, tensions escalated between Lorenzo and the old guard--especially when Lorenzo declared Continental bankrupt in the fall of 1983. In October 1994, five months after Continental exited its second bankruptcy, Bethune was elevated to CEO and created a Go Forward Plan to return Continental to profitability. Two years after unveiling the Go Forward Plan, Continental was at the top of the industry in a number of important performance metrics. KEY ISSUES: Continental ranked tenth out of the ten largest U.S. airlines in all key customer service areas as measured by the Department of Transportation: on-time arrivals, baggage handling, customer complaints, and involuntary denied boardings. The airline had already been in bankruptcy twice, and was headed for a third round as its cash dried up. STRATEGIES FOLLOWED FOR TURN AROUND: The turn-around plan — the Go Forward Plan 'A' — had four different elements each of which were given an inspirational title : ...
Words: 1269 - Pages: 6
...Karasti 1 Aviation and the Law Kevin Karasti The Demise of Eastern Airlines By 1985 Eastern Airlines had become one of the United States’ largest airlines. They operated in twenty-six countries on three different continents, and were considered one of the four prominent airlines in the U.S. Although for a time they were successful, it wasn’t long after that Eastern Airlines began to run into problems. Eventually Eastern made a decision that would prove to be disastrous for the airlines-- they sold the company to Frank Lorenzo. Why did Eastern sell to Texas Air? For starters, the 1970's and 80's proved to be a very difficult time for many airline companies. In the late 70’s the Airline Deregulation Act of 1978 was passed. The enactment did provide many new freedoms (freedom to expand their route systems for example), and positive outcomes for airline carriers. One of which was flexibility to develop innovative pricing structures. This flexibility allowed carriers to expand into new markets. Yet with the positive changes of deregulation, came negative consequences for the airlines-- “airfare wars.” Companies now had to compete to remain in the market. They waged airfare wars against their rivals, slashing their own prices to knock off smaller companies. Many airlines struggled tremendously, and had difficulty keeping their doors open. This made many air carriers susceptible to unwanted, hostile takeovers and mergers. In 1985 Eastern was a large airline (three...
Words: 2493 - Pages: 10
...Continental Airlines and United Airlines Merger Tony McDougal December 2, 2012 Professor Bates Abstract This paper explains the challenges faced by two major U.S. airlines, United and Continental airlines in an attempt to merge, and form the world's largest airline based in the United States. This consideration is based in relation to the movement of passengers via air traffic. The airline merge occurred in order for each airline to survive and be competitive within the airline industry. The paper explains briefly the reason for this merger, the strategy it used and went through to accomplish the merger. It also explains some pros and cons the merger and management faced. It explains the vision of the newly created company in reference to where they want to be in the future and the profit of revenue they foresee to earn with this merger. This paper outlines the structural change the new United Airlines came up with after the merger took place and how both United and Continental Airlines management, employees, and customers adapted to the merge. Continental Airlines and United Airlines Merger The merger of United and Continental airlines that was under way in 2008 formed the third’s world largest airline. This merge occurred during the decrease of air travel from heightened security measures against terrorism and high fuel costs. During this time, the United States government also tried to help by giving the airline industry monetary...
Words: 2940 - Pages: 12
...against perceived to be monopoly dangers, federal regulators wanted 13 branches divested in New Mexico, and the towns. The towns left with just one bank when the merger was complete. Bank of America becomes the largest bank holding company in America, and the second largest bank when ranked by market capitalization. Their 2008 acquisition of Merril-Lynch also solidified Bank of America as a serious force in investment banking. The merger provides much revenue potential combined with no earnings and low to shareholders, establishes a company that will have $570 billion in assets, $45 billion in shareholders' equity and a market capitalization of $133 billion. The merger expected to close in the fourth quarter of 1998; the company had relationships with 29 million households in 22 states across the nation and served two million businesses in the United States and 38 other countries. Its 180,000 people will live, work and participate in thousands of communities across the country. http://www2.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/01-23-1999/0000852424&EDATE Merger, Acquisition, and International Strategies 3 Boards of directors of both corporations, created a new holding company called BankAmerica Corporation, approved the merger agreement. The agreement provides for BankAmerica shareholders to exchange each of their...
Words: 1050 - Pages: 5
...| 2012 | | Southwest Airlines Megan Wilson | [The Future of Southwest airlines] | Good Evening board members and staff, I am Megan Wilson, the Chief Executive Officer (CEO) of your company, Southwest Airlines. We have gathered here this evening to take a look at the current position of our company, how we are measuring up to our competition, and what I am proposing we do to continue our success within our future. First I will start off with the mission of our airlines, as many of you know it is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. Our mission to our employees is to be committed to provide our employees with a stable work environment with equal opportunity for learning and personal environment. 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. I feel that these two missions are extremely important for us to live by as we would not be successful if we didn’t have our customer base that we do and we would not have our customer base if we didn’t have the kind and caring employees that we do. Therefore at this time I would like to thank all of you for your hard work and dedication to this company. Now I am going to move on so that we can take...
Words: 1335 - Pages: 6
...because the original intent of freedom of the press was to protect reporters from media retaliation and this Court recognized this privilege in Branzburg v. United states. The First Amendment granted reporters wide protection because the very intent of the founding generation was to protect the press, and the free flow of information that reporters create, from oppressive government interference. See Grosjean v. Am. Press Co., 297 U.S. 233, 245 (1936). The First Amendment states that “Congress shall make no law…abridging the freedom of speech, or of the press.” The First Continental Congress explained the freedom of the press as important...
Words: 1658 - Pages: 7
...ANALYSIS OF THE AIRLINES INDUSTRY Introduction The airlines industry in the U.S. provides air transportation services for passengers. To determine the current state of the airlines industry, various analyses were performed. An analysis of the macro-environmental factors affecting the industry was first analyzed. Then, a Porter’s five forces analysis was used to determine the attractiveness of the industry, and current changes in the industry as a whole. Key success factors were analyzed to determine a firm’s ability to thrive within the marketplace. And lastly, a strategic group map was created to assess the companies that are best positioned and worse positioned in the industry, along with a financial analysis of major competitors in the industry. Macro-Environmental Factors Affecting the Industry Macro-Environmental components include, “demographics, social values and lifestyles, political and legal factors, economic conditions, environmental conditions, technological factors, and global forces” (Gamble, Thompson, & Peteraf, 2012, p. 79). The most influential factors in the airlines industry are economic conditions and environmental factors. The economic recession in 2009 greatly affected the airlines industry. Poor economic conditions reduced the demand for consumer and business travel. According to the IBIS World database, “Rising unemployment rates and falling disposable income during the recession resulted in a stark 16.3% decrease in revenue” (Brennan, 2013)...
Words: 2528 - Pages: 11
... In 1868, Carlsberg began exporting to other neighboring countries in Eastern Europe. The first barrel of Carlsberg was exported to a grocer in Edinburgh, Scotland. Within that year, the lager became very popular in Scotland and other countries such as India, Singapore, and Hong Kong. Jumping forward a hundreds years, in 1970 Carlsberg and another renowned Danish brewer merge together called Tuborg. Together the breweries developed their business with exporting, licensing agreements, and breweries outside of Denmark. To further their growing export Carlsberg and Tuborg combined under one name becoming the United Brewery’s. This combination has enabled their unique lager for global export as well as continental styles for both domestic and foreign markets. During that profitable time, one of the most important markets to the United Breweries was Great Britain. The United Brewery’s two main brands were at one’s disposal in essentially every European country. Moving into the 1990’s, export sales were declining both on Eastern and Western Europe, yet Carlsberg achieved modest but still maintained a steady growth in sales. In 2001, Carlsberg and Norwegian Orkla ASA’s merge, forming a new joint venture to regain there position as one of the strongest brewers brands in the world. Carlsberg mainly concentrated in the Northern and Western parts of Europe. Subsequently, Carlsberg breweries became the leading brewery in the Nordic area. In 2004, Carlsberg A/S owned 40% of...
Words: 381 - Pages: 2
...Southwest is an impressive organization because it’s the most flown airline within the United States and has been consistently profitable (Northouse, 2009). Southwest is ranked 205 in the Fortune 500 and their profits in 2011 were 459 million which exceeded their 2009 profits of 363.6 million (CNNMoney, 2011) Against industry problems and business pressures-air-traffic congestion, merger of rivals, stricter government regulations regarding aircraft safety and maintenance, and mounting customer dissatisfaction with airline service, Southwest has managed to continue climbing to the top. The company strategy from day one was to be an airline that pursued a low-cost/low-price/no-frills strategy. This strategy opened their market segment to a larger portion of the U.S population and gave the company their tag line “The Freedom to Fly” (Northouse, 2009). Southwest also known as “the love airline” first took flight in 1971. Herb Kelleher, initially a lawyer retained by the airline to get it off the ground, was running the place by 1978. The airline was initially known for sexy flight attendants in hot pants to gain attention before it became the leader in low cost fares. "You can have a low-cost carrier and people still don't fly it because they don't know about it," Kelleher said. "And so, the schtick kind of fit in with getting known" (CBSNEWS, 2012). The airline now employs 34,000 people, services 64 different facilities, owns 500 planes, and is the nation’s sixth largest airline...
Words: 3391 - Pages: 14
...Quality Management at United Airlines Brandon L. Smith Keller Graduate School of Management GM 588 6/20/2012 Dr. Kim Hunley INTRODUCTION United Airlines is a major airline based in the United States and one of the world’s largest airlines. It was formed in 1934. It is a subsidiary of United Continental Holdings Inc. Its headquarters are located in Chicago, IL. United is a founding member of the Star Alliance, the largest alliance in the world. On October 1, 2010 United and Continental airlines merged together forming the world’s largest airline in revenue passenger miles and second largest in fleet size and destinations. “The new United will offer customers an enhanced travel experience, combining the best products and services each carrier has to offer,” (The World's Leading Airline, 2012). The airline is supposed to be the airline that customers want to fly, the airline employees want to work for and the airline shareholders want to invest in. The key highlights of the merger are the following: * World’s most comprehensive global network, including world class international gateways to Asia, Europe, Latin America, Africa and Middle East with non-stop or one stop service from virtually anywhere in the United States * Most modern and fuel-efficient fleet and the best new aircraft order book, among U.S. network carriers * Industry-leading frequent flyer program that will provide more opportunities to earn and redeem miles worldwide *...
Words: 3053 - Pages: 13
...International Business School Continental Illinois Bank Failure Fanni Holló, Kata Szilczl, Kouam Guiffo Yvan Vanel The failure of Continental Illinois National Bank and Trust Company (CINB) One of the most famous features on the landscape of the banking crisis in 1980s was the crisis involving the Continental Illinois National Bank and Trust Company in May 1984, which still is one of the largest bank failures in U.S. banking history. The collapse of CINB was a significant event in banking history that had a moral for both bank risk managers and regulators. It showed how quickly the exposure of credit problems at a well regarded bank could turn into a liquidity problem that danger not only the survival of the bank but also the financial system in the US. Economic and financial environment at the time of the failure CINB was born from a merger of two banks located in Chicago, the Commercial National Bank and the Continental National Bank. In 1910 when these two banks merged they had $175 million in deposits, a large amount at that time. In 1984, it was the 6th largest bank in the U.S., with nearly $40 billion in assets. In the mid 1980s, the US financial system faced harsh problems. For example, three major organizations, Lockheed Corporation, Chrysler Corporation, and New York City required government aid, bailout, to avoid financial crisis. This economic disorder led to troubles in financial organizations. Between 1984 and 1985 there were nearly 200 bank failures....
Words: 2357 - Pages: 10
...become a major percentage of total airline operating costs. Fuel accounts for roughly 40% of total operating expenses and for U.S. carriers it totaled $47.3 billion last year (Grose, 2013). In an attempt to reduce such high costs, airlines have implemented a variety of fuel saving strategies. Weight Reduction Weight reduction is a major concern for airline fuel savings. Every aspect of aircraft design is looked at from a weight/safety standpoint. Below are a few of the most novel approaches to weight reduction that airlines have implemented in the past few years. Phasing Out Paper In 2011, United and Continental pilots began using 1.5lb iPads as electronic flight bags to replace the traditional 38lb paper flight manuals. The projected fuel savings was calculated to be 326,000 gallons of jet fuel for a savings of $1.2 million per year (United Continental Holdings Inc., 2011). This year, American Airlines received regulatory approval for flight attendants to swap out their 5lb paper manuals for 1lb Samsung tablets for a fuel savings of $650,000 per year (Dastin, 2014). While there is a large upfront capital cost for the purchase of thousands of tablets, this is offset by no longer having to print millions of sheets of paper each year for manuals. As for in-flight magazines, Singapore Airlines has been experimenting with providing digitized content for its three magazines on long-haul flights. For every 25lb reduction in paper, a savings of $400,000 in fuel cost...
Words: 1722 - Pages: 7
... 6/15/2011 | INTRODUCTION United Airlines is a major airline based in the United States and one of the world’s largest airlines. It was formed in 1934. It is a subsidiary of United Continental Holdings Inc. Its headquarters are located in Chicago, IL. United is a founding member of the Star Alliance, the largest alliance in the world. On October 1, 2010 United and Continental airlines merged together forming the world’s largest airline in revenue passenger miles and second largest in fleet size and destinations. “The new United will offer customers an enhanced travel experience, combining the best products and services each carrier has to offer,” (The World's Leading Airline, 2011). The airline is suppose to be the airline that customers want to fly, the airline employees want to work for and the airline shareholders want to invest in. The key highlights of the merger are the following: * World’s most comprehensive global network, including world class international gateways to Asia, Europe, Latin America, Africa and Middle East with non-stop or one stop service from virtually anywhere in the United States * Most modern and fuel-efficient fleet and the best new aircraft order book, among U.S. network carriers * Industry-leading frequent flyer program that will provide more opportunities to earn and redeem miles worldwide * Optimal hub locations in 10 cities, including hubs in the four largest cities in the United States As of right now the two...
Words: 3063 - Pages: 13
...Patrick Henry’s “Give me liberty or give me death” speech in 1775 along with Thomas Paine’s “Common sense” pamphlet in 1776 greatly influenced the ideas of American colonists when they began questioning their role in the empire of England. The declaration of resolves of the first continental congress in 1774 and the declaration of independence, devised in 1776 had the same effect on these American Colonists. About a year after the declaration, the articles of confederation were published as the first actual constitution, having it’s own effect on personal feelings of colonists. On one hand, the American colonists had a self government which could have influenced their mindset during the 17th through 18th century. On the other hand, a speech by Patrick Henry, a pamphlet by Thomas Paine, two different declarations, and the articles of confederation all lead up to questioning in terms of authority in the empire of England and are what truly caused the mindset of American colonists to change. In March 1775, at the third Virginia convention, held in St. John's Church in Richmond, Patrick Henry gave his iconic “give me liberty or give me death” speech to discuss the latest relations with Great Britain. During Henry’s speech, he states "There is no longer any room for hope. If we wish to be free if we mean to preserve inviolate those inestimable privileges for which we have been so long contending if we mean not basely to abandon the noble struggle in which we have been so long engaged...
Words: 1606 - Pages: 7
...The main cause that makes a company have to make changes is the external environment. It usually forces organizations to make changes to its mission, culture, leadership, and operating strategies. Changes in the 12 drivers bring a series of change to the overall structure. Changing anyone of the 12 “pillars” will influence the adjoining ones. But, changing the entire structure may or may not affect the entire system. These changes are influenced by the motivation of the individuals. They will impact the change to the entire organization. They all interact with each driver on the model. The Burke-Litwin Model has these basic parts that make up an overall change for a company. Change effect one part and then affect the overall performance of the model. 1. External environment: The key external cause on the organization must be identified and clearly established. 2. Mission and Strategy: The overall “vision” should be seen through the eyes of the employee. 3. Leadership: Leadership should be understood. 4. Organizational Culture: This should understand implied rules, regulations, customs, principles, and values. 5. Structure: The function based structure should be understood, such as responsibility, authority, communication, decision, making, and control structure. 6. Systems: This includes all the policies and procedures. 7. Management Practices: How the management accepts and conforms to the overall concept of the organizations strategy. ...
Words: 3568 - Pages: 15
