Airlines Hedging Strategies

Derivatives Market
HOW MUCH SHOULD WE USE DERIVATIVES HEDGES?
A Study in Airline Industry
Changgull Song
Fordham University, Deming Scholars MBA, changgull@gmail.com
For managers of airlines, it is not always easy to predict the jet fuel costs, which affect the profitability of the firm. As a solution, some airlines
aggressively hedge against the variability, but some others don't. Here, we are trying to find an answer to a question, "How much should they hedge?"
Variability in Earnings: Is it Bad?
In a management world, it is a common knowledge that variability harms the efficiency. For example, a combination of variability in lead–time of raw
materials will make the firm harder to meet the manufacturing lead–time, and eventually harm the ... Show more content on Helpwriting.net ...
In Figure 1, jet fuel costs reflect adjustment of gain or loss from using derivatives for hedging purpose. Among the six airlines studied, Southwest was
the only airline that maintained aggressive long–term fuel hedging plan. Figure 2 shows Southwest's jet fuel costs to operation expenses ratio before
and after adjustment of its fuel hedges.
[pic]
Figure 2. Southwest Airline 's Jet Fuel Costs to Operation Expenses Before and After Hedge Gain
(EDGAR SEC Filngs, 2006)
Southwest's gain from hedges is large enough to compare with its operation income. As shown in Table 1, from 2004 to 2006, it will not be an
exaggeration to say the most (or even more) of its operating income came from hedge gain. How was it possible? Or, why other airlines that hedged
part of their jet fuel costs could not result in similar results?
Table 1. Airline 's Operating Income [Hedge Gains] (USD, million) (EDGAR SEC Filngs, 2006) (* 2006 Q1, Q2, and Q3)
| |1999 |2000 |2001 |2002 |
|Southwest |70% @ $36/barrel |55% @ $37/barrel |35% @ $37/ barrel |30% @ $39/barrel |

Jet Blue vs Delta
Analysis of the Force
Overall, the five forces model suggests that the overall intensity of competition in the airline industry is likely to be severe. Back in the early 1980 's
competition was very intense. During the late 1980 's the monopolization of major routes by a few major carriers, the limited availability of free
landing spots at major hubs and the emergence of limited brand loyalty and tacit price agreements have all helped reduce the intensity of competition.
However, as already mentioned, slumping demand in the early 1990 's plunged the industry once more into a severe price war.Airline travel is a
commodity–type product, with limited potential for differentiation.
Rivalry among Firms: High
Rivalry among firms within ... Show more content on Helpwriting.net ...
Because it 's relatively easy for weaker airlines to obtain credit, the industry has become saturated.
Brand identity is important in the airline industry, and benefits larger airlines. Major carriers allocate considerable resources to marketing efforts.
Frequent flier programs and other incentives have been successful in enticing travelers to fly with certain carriers. The frequent flyer incentive can
often be strong enough to cause a customer to choose one carrier over another –– even when the other carrier offers a lower fare.
Barriers to entry are also heightened by the hub system in the airline industry. Carriers can offer travelers more choices while tying up less capital
through their hubs. As a result, the hub system creates market power for large carriers.
Threat of Substitutes: Low
There are several substitutes to air travel, but over long distances and flying between continents, there are no real substitutes that can bring humans face
to face with speed. The decision to use automobiles or trains is influenced by time, money, personal preference and convenience. Video conferencing
takes away the one on one human contact and socialization that air travel allows you to reach.
JetBlue В– Discount Carrier
In the six years since its launch, JetBlue Airways has focused on creating a new airline category –– an airline that offers value, service and style. Based
out of New York

Effect of Oil Prices on Airlines Industry
International
Oil Inflation &
Airlines Industry
Prepared for
Prof. Mahima Sharma
Faculty Member
Jaipuria Institute of Management
Prepared by
Shailesh Bharadwaj (cft07_128)
Sanjeev Prasad (cft07_130)
Sarita Singh (cft07_131)
Saurabh Bansal (cft07_135)
Shashank Anand ( cft07_138)
Students, PGDM– Trimester–4
July 31, 2008
INTRODUCTION
This report has been made to draw the attention of the people how the aviation industry has been dependent upon the Oil prices. Since the research has
been done in the prospect of International Business so only those aspects have been covered that shows the dependency of the industry on the other
countries. As we know that India is one of the fastest growing countries. It has become the ... Show more content on Helpwriting.net ...
Airlines are known to take on contract employees such as cabin crew, ticketing and check–in agents.
Variation in domestic & foreign oil price

The time is not going well for airlines industry. It is suffering in a pity condition due to increase in aviation turbine fuel (ATF). ATF accounts for 35 per
cent of the total airline expenses. The price of ATF is increased 3 times in last 3 years. Just in last 5 months it has increased by 65%. Interesting thing
is that in the market of Singapore & Dubai, it is Rs.45 per liter but in India it has the 21% higher price. First let's know why its price is higher.
In India the aviation companies have to spend more to purchase ATF. Airlines in India pay the most for fuel when compared with other Asia
Pacific hubs like Singapore, Hong Kong and Colombo, mainly on account of higher tax rates. Aviation Turbine Fuel or jet fuel in Delhi, the city
that houses the nation 's second busiest airport, costs USD 1,291 per kilolitre while the same in Singapore is sold at USD 1,067 per kl. It costs
USD 1,100 per kl in Hong Kong and USD 1,113 in Colombo. For airlines, refueling cost in Delhi is 21.73 per cent higher than that in Singapore.
Similarly, airlines in India pay 14.82 per cent and 13.87 per cent more than what those in Colombo and Hong Kong pay respectively.
Over the past four months, cost of jet fuel in Delhi has risen from USD 1,023 per kl in April to USD 1,291 per kl in August, a

U.s. Airline Carriers And Canada
Case Situation
Over the past three years, the number of Canadians crossing the border to take the advantage of the cheaper U.S. airline carriers was increasing. The
young adults from 18–24 years old led the way with 32% have down so. Also, survey suggests that the residents from Ontario and British Columbia
were most frequent flyers from the U.S. airports with 23% of the respondents. Canadians make up 88% of the customers at the Fall Airport. YVR and
YWG are estimated to lose nearly 1,000,000 and 250,000 passengers to the U.S. each year respectively. WestJet is affected by this situation in the
price battle. In order to keep its fares competitive, WestJet announced baggage fee, but was received negatively by many customers.
Research ... Show more content on Helpwriting.net ...
At the end of 2014, the aircrafts in possess are 109 Boeing 737 NG, and 19 Bombardier Q400, which are all short and medium–range narrow–bodied
airliners. We assume that majority of WestJet customers are travelling for leisure, and the determinant of which airline to choose is the price.
Target Market
Demographic Segmentation
30–65+
Midsized families, young couples with children, old couples with grown children
30–80k income
Professional, academic, retired, small business owner.
Geographic Segmentation
Canada
Big cities
Large population size – 250,000+
Urban and Suburban areas
Psychological Segmentation

Working class, middle class, upper middle class
Suburban families, retired couples, single urban professional
Highly organized and detail oriented.
Behavioural Segmentation
Regular, holiday, and seasonal occasion
Looking for customer service and convenience benefits
Regular users, medium to frequent users
Medium to strong loyalty
Positive view of WestJet.
SWOT Analysis
Strength
Condition of fleet
Reliability
Customer service
Make profit every year
Strong alliances
Schedules
Weakness
Ticket prices
Baggage fee
Limited international flights
Expensive international flights
Losing to cross boarder
Opportunities
Convenience
Growing tourism rate
Positive outlook on global air freight industry
Service northern work freight
Canadian airline
Threats

American airports

The Southwest Airlines By Herb Kelleher And Rollin King...
The Southwest Airlines was established in 1967 by Herb Kelleher and Rollin King and adopted its current name in 1971. The airline company is a best
known for its lowest prices in the airline industry. To better understand the strengths and weaknesses as well as opportunities and threats of the
company if through the S.W.O. T. analysis. The strengths and weaknesses are internal factors while opportunities and threats are external factors.
SWOT Analysis
Internal External
Strengths:
World's largestlow–cost carrier
Free bag check
Among most profitable airline in the world
Excellent customer service
Among best Airlines to work forOpportunities:
Expend ... Show more content on Helpwriting.net ...
According to the 2016 North America Airline Satisfaction Study conducted by J. D. Power in the low–cost carrier segment, Southwest Airlines ranked
second, and improved in aircraft and flight crew factors (see Figure 2). The 2016 North America Airline Satisfaction Study measures passenger
satisfaction among both business and leisure travelers of major carriers in North America. The study is based on responses from 10,348
passengers who flew on a major North American airline between March 2015 and March 2016. The study was fielded between April 2015 and
March 2016. Southwest also consistently shows up on the top of employee satisfaction studies. Forbs lists Southwest Airlines as the 13th best
employer in 2016. Glassdoor rated as one of the companies with the most satisfied employees. Southwest ranks particularly high on work/life
balance, career opportunities, employee morale and culture. Southwest also offer perks such as free travel for spouses, children and parents as well
as having higher rating for "paying fair wages than peers". It is also fun to work at Southwest; the core ideology is that fun and work can be combined
and having a fun–LUVing attitude means to "Be a passionate Team Player/ Don't take yourself too seriously/ Celebrate successes".
Weaknesses
One of the major weakness that the airline has is limited international flights. Only recently Southwest start offering international flights to Mexico,

Airline Business : Jet Blue Airways
Phase 2
Industry
Jet Blue Airways is a part of the transportation industry, specifically the airline business. Air travel remains a large and growing industry. It facilitates
economic growth, world trade, international investment and tourism and is therefore central to the globalization taking place in many other industries.
The commercial aviation industry in the United States alone has grown dramatically since the end of World War II.
In the past decade, air travel has become more and more popular and has a growing increase of 7% per year (The Airline Industry). Travel for both
business and leisure purposes grew strongly worldwide. Scheduled airlines carried 1.5 billion passengers last year (The Airline Industry). In the
recreational ... Show more content on Helpwriting.net ...
Congress passed the Airline Deregulation Act in 1978, lessening the entry of new companies into the business and giving them freedom to set their
own fares and fly whatever domestic routes they chose (The Airline Industry).
The Department of Transportation (DOT) breaks the airline industry into four categories: regional, international, national and cargo (Investopedia
Staff). The regional category of the airline industry is the commuter airlines. Aircraft that are in the regional sector usually have less than 90 seats
and have a flight time of two hours or less. In 2005, regional flights carried about 134 million passengers who accounted for one in five domestic
travelers, and over 14,000 daily departures, and a combined fleet of 2,700 aircraft machines (Forbes, Lederman).
Fast forwarding to 2009, there were five publicly held regional flight providers: SkyWest, Republic, Mesa, Pinnacle and ExpressJet. Today there are
two – SkyWest and Republic, who have since returned to profitability but still struggle with obstacles. Mesa filed for bankruptcy, and later combined
forces with Trans States, as a privately held carrier. ExpressJet was purchased by SkyWest and merged with Atlantic Southeast Airlines. Pinnacle also
filed for bankruptcy, was acquired by Delta, changing its name to Endeavor (CAPA Centre for Aviation).
In 2003, JetBlue Airways ordered 100 regional jets for $3 billion from Brazilian aircraft maker, Embraer, in order

9/11 Informational Essay
World Trade Center Attack September 11, 2001 was not just any ordinary day for the citizens of the United States and the city of New York, but a
devastating attack that has put us all in shock and fear. As all of you know, the Tuesday that this country was ambushed and attacked destructively by
terrorists, was one of the saddest days America has ever seen. Not only did it affect the people that were in theWorld Trade CenterTowers and the
loved ones who unfortunately passed away, but it affected our country as a whole. Scared, devastated, astonished, and surprised are just a few words
that begin to describe September 11th. As separate states and people, I can confidently say that America has never been closer together as one than on
that ... Show more content on Helpwriting.net ...
On the day of the attacks, New York City mayor Rudy Giuliani proclaimed, "We will rebuild. We're going to come out of this stronger than before,
politically stronger, and economically stronger. The skyline will be made whole again." The damaged section of the Pentagon was rebuilt and
occupied within a year of the attacks. The temporary World Trade Center PATH station opened in late 2003 and construction of the new 7 World
Trade Center was completed in 2006. One World Trade Center is currently under construction at the site and at 1,776 ft. upon completion in 2013,
will become the tallest building in North America. On the World Trade Center site, three more office towers are expected to be built one block east
of where the original towers stood. Construction has begun on all three of these towers; they are expected to be completed after One World Trade
Center. Not only did the attack of 9/11 physically, emotionally, and physiologically hurt U.S citizens, but it also hurt America economically, culturally,
and health wise. After the attack happen, the U.S stocks lost $1.4 trillion in valuation for the week. In New York City, about 430,000 job
–months and
$2.8 billion dollars in wages were lost in the three months after the attacks. The economic effects were mainly on the economy's export sectors. The
city's GDP was estimated to have declined by $27.3 billion for the last three months of 2001 and all of 2002. The U.S. government provided

Alaska Airlines Case Analysis
Alaska Air Group, Inc. (ALK) operates as a holding company, which through its businesses, Alaska Airlines, Horizon Air, and Virgin America,
encompasses commercial aviation services. The company was founded in 1985 with Alaska Airlines and acquired Horizon Air and Jet America
Airlines in 1986. Jet America Airlines was merged intoAlaska Airlines in 1987. In December 2016, Alaska Air Group acquired Virgin America for
approximately $2.6 billion. However, until 2019, Alaska Air Group will operate Virgin America and Alaska Airlines separately. Alaska Air Group is
headquartered in Seattle, Washington, United States.
Alaska Airlines History For over 75 years, Alaska Airlines has been guided by honesty, compassion, originality, proficiency, and a distinctive spirit.
Alaska Airlines started in 1932 as McGee Airways by Linious "Mac" McGee. He painted "McGee Airways" on a three–passenger Stinson and began
flying out of Anchorage, Alaska. In 1934, McGee combined with Star Air Service, with 22 aircraft, they became the largest airline in Alaska. In
1937, business expanded again with the acquiring of Alaska Interior Airlines. Later that year, McGee sold Star to one of his former pilots, Don
Goodman, who renamed the company Star Air Lines. In 1938, the Civil Aeronautics Authority (CAA) was created to regulate airlines. In 1944, Star
Air Lines changed its name to Alaska Airlines. The company grew despite a shortage of workers during the war and cash troubles that had

Economic Analysis of the Airline Industry
ec
Economic Analysis of the Airline Industry
Tisha Smith
Axia College of UOP
ECO 305 Economic Theory
George Harris
March 18, 2007
Economic Analysis of the Airline Industry Introduction The airline industry is one that is both costly and necessary to the economy. Costly because of
the funding provided by the government, recent layoffs; which has a hand in rising inflation, dealing with negative externalities and high security
risks; necessary because the ease and speed of air travel is needed to keep countries productive and competitive. It is a key component to the economy.
Many businesses rely on air transportation as well as consumers and individuals employed within the ... Show more content on Helpwriting.net ...
This is because air travel is not the only means of transportation. A person would like the speed and convenience of travel by air, but other
transportation alternatives exist. Air travel is both a luxury and a necessity depending on the purpose of its use. For the purpose of vacationing or
visiting friends and family, air travel could be considered a luxury, but for the individual or company who relies on the speed of air travel to complete
business transactions, it would be considered a necessity. The supply and demand of air travel is impacted by several factors. Air travel is a normal
good. The demand for air travel can diminish slightly because there are other means of safer transportation available. The demand can also decrease
if it becomes too unaffordable. Consumers with a higher income are able to spend more time vacationing with the use of air transportation. Air travel
can be substituted with other forms of transportation if the income of the consumer decreases. The price elasticity of supply for the Airline industry
however, is inelastic because even with the shifts in demand for air travel, which were caused by events such as the 9/11 attacks and high gasoline
prices, the rates and fares for air travel are able to be set without being effected by those events. The airline industry provides a transportation

9/11 Cause Effect
"The planes were hijacked, the buildings fell, and thousands of lives were lost nearly a thousand miles from here. But the attacks on the World
Trade Center and the Pentagon were an attack on the heart of America" (Newman). For every cause there is an effect, and unfortunately the effects
of 9/11 are disturbing. I like to say that everything happens for a reason, and the reasons of 9/11 still continue to puzzle the people today. The attacks
on world trade center and pentagon on September 11 2001 were tragic and devastating not only for the victims, but all the people of United States of
America. The tragic losses will forever haunt the mind of who ever lived to witness this heartbreaking event. On the Tuesday morning of September
11th,... Show more content on Helpwriting.net ...
Nicholas Greek Orthodox Church. At least 200 people fell or jumped to their deaths from the burning towers landing on the streets and rooftops of
adjacent buildings hundreds of feet below. Some occupants of each tower above the point of impact made their way toward the roof in hope of
helicopter rescue, but the roof access doors were locked. 2,606 people died from the Towers collapsing (www.wikipedia.com). At 9:37 a.m., the
hijackers crashed American Airlines Flight 77 into the Pentagon in Arlington, Virginia. Flight 77 crashed into the Pentagon's western facade, killing
the 59 on board the plane and 125 military and civilian personnel inside the building ("9/11 Memorial timeline"). A hundred and six are severely
injured in the ensuing fire. Within 30 minutes of two planes hitting the World Trade Center twin towers, American Airlines Flight 77 departed Dulles
International Airport bound for Los Angeles. The Boeing 757 was hijacked and crashed, loaded with 10,000 gallons of fuel, at 345 mph into the west
side of the Pentagon. The five–story Pentagon is made up of five pentagonal structures arranged in rings. The plane took out light poles in the parking
lot, hit the ground just outside the outermost ring of the Pentagon, turned up on its wing, and penetrated the E ring midway between corridors 4 and 5

Jet Blue Case Study Essay example
1. The decision maker in the Jet Blue case was former CEO David Neeleman. He was the person who started Jet Blue and formed it to become a
low cost airline provider, providing luxury and comfort and destinations to various cities at a low affordable cost. He understood how to cut cost
and keep operating expenses low, and as a result Jet Blue had rapid expansion and flew to 53 destinations in 21 states, including Mexico, Puerto Rico,
and the Caribbean. Up until 2007, when David Barger took over, Neeleman made Jet Blue prosperous and consistently made strategic moves in order
to produce the best outcome in the areas of maintenance, total operating expenses, and benefits. Even as a response to the ice storm in 2007 where
passengers were... Show more content on Helpwriting.net ...
Increases in cost were partly also due to rise in fuel cost in an attempt to cost operating costs. Customer Complaints: Customer complaints (ranging
from cancelled flights, poor customer service, and discrimination) had placed Jet Blue in the top 5 (#2, 2, and 4 respectively) of the 9 airline
carriers. This is something that has a direct impact on the customer and has room for potential lost business. Lack Of Proper Training: In a survey
by employees, the results showed Jet Blue wasn't fully training its staff with proper tools and skills to handle various situations. Many employees
struggled before a year on the job. This exemplified a weakened infrastructure. Flight attendants, maintenance crews, pilots, and other members
work together to make sure operations run smoothly and customers have the best experience. If one area is struggling, the infrastructure begins to
collapse such as the ice storm in 2007 where 1,100 flights were cancelled over 6 days, and 130,000 passengers were affected. Their systems didn't
support a huge crisis which led to a backup in phone lines and standbys. This left a negative impression from the consumer's point of view, and has
potential for lost business. Lost Baggage: Jet Blue ranked in the top 3 for 2005, 2006, and 2007 for lost or damaged baggage; when a customer's
personal

Case Study : Delta And Virgin Airlines Essay
This paper will review the case study of Delta Airlines which was suffering like all its competitors with rising fuel costs which averaged anywhere
between 30 to 50 percent of its total operating costs. This paper will answer six questions which will help identify what the company did to handle the
high cost of fuel. The questions that I will answer will include the following.
1. What drives the basic economies of the airline industry? The refining industry?
2. How is Delta different from other airlines?
3. How would owing the Trainer Refinery help Delta manage its fuel costs in the future? Is this offset by operation cost?
4. What impact does buying an oil refinery have on Delta as a company? Is this a good strategic move? Why/why not?
5. How does the merger between Delta and Virgin Airlines impact the company as a whole? (Outside research required).
6. How does the topics in Chapter 7, Chapter 8 & Chapter 9 link to this case study?
The Airline industry has experienced continual problems with rising costs with both fuel and maintenance which has caused them to increase their
fees to the consumers to pay for those rising costs. This paper will help explain what an airline such as Delta does to help alleviate such costs without
forcing its consumers to flip the bill through high fees that consist of tickets, baggage fees and food. The costs of doing business in aviation today
have spiraled out of control making it very expensive for both airlines and the

Westjet Research Paper
WestJet
Westjet Airline
WestJet Airline was founded in 1996 by Clive Beddoe and a team WestJet airlines were started with the philosophy that just because you pay less
doesn't mean you should get less.
Clive Beddoe and team started their journey with three aircraft fly to five destinations and 220 friendly WestJetters– a journey that would help them
become a company of more than 8,800 passionate WestJetters flying one of the youngest fleets of Boeing 737 Next–Generation aircraft to more than 80
destinations in North America, Central America and the Caribbean.
Culture
"Customer care" is what WestJet Airlines says in their ads. WestJet entire corporate culture has been built around caring for their customers, by
providing a great ... Show more content on Helpwriting.net ...
They are using TV, Social Media, Internet to get popular and known in people. They also launch many advertising campaign and introduces their
different promotional offer to the customers.
WestJet company is on both twitter and facebook and they make sure that the always keep new information posted up there too.
Place:
As mentioned above Westjet WestJet offers high quality customer service, WestJet offers flights to over 30 cities in North America, including some of
the cheapest airfares to destinations such as Hamilton, Calgary, Toronto, Montreal, Winnipeg, Edmonton, Calgary, Vancouver and more. WestJet has
recently expanded its service into the
United States and now offers bargain flights to Florida, Hawaii, Los Angeles, Las Vegas, Phoenix, New York, and more. WestJet Airlines also offers
low cost flights to the Caribbean, with bargain pricing to Punta Cana, St. Lucia, Puerto Vallarta, Nassau, and Puerto Plata. Below pictures shows the
different places westjet airlines travel to:
Corporate Social Responsibility at WestJet Airlines
Environmental commitment
WestJet commitment is to make planet Earth a better place to live is part of their responsible growth.

Greener in the air
Burning aviation fuel releases greenhouse gases, such as carbon dioxide (CO2), into the atmosphere. WestJet greenhouse gas environmental policy
statement is focused on core principles: * Invest in fuel–efficient jet aircraft. * Invest in technology and procedures that

Essay on Jet Blue
Jet Blue has an opportunity to remain cutting edge in the airline industry by continuing to be low–cost and expanding carrier. A great market for Jet
Blue to expand to would be towards the Caribbean's. As well as possibly lobbying Washington to lift travel sanctions in Cuba, which at one point was a
major vacation getaway for Americans. This opportunity fits into Jet Blues current business model of short distance flights at a lower cost than the
competition.
Jet Blue is a shinning star in the gloomy airline industry. Jet Blue has been showing great earnings and growth since its incorporation in 2000. Jet Blue
uses innovative strategies to further their success in a market, which has been showing nothing but losses across the board. ... Show more content on
Helpwriting.net ...
Along with reducing the amount of middlemen customers have to deal with, added to his reduced expense structure which in turn proved to be cost
effective.
David Neeleman originally worked for South West Airlines and helped increase there business, but wanted to venture out on his own. Neelemen
experienced set backs because his prior employer made him sign a no compete contract for five years. During those five years Neeleman was able to
complete a solid business plan, which would use South West Airlines business model but with better marketing strategies
Jet Blue was built on a strong foundation with experienced and knowledgeable people making decisions. Neeleman felt that certain key employees
needed to be put in place to have this organization grow the way it has. So a solid team was put in place and the machine has been oiled. In order for
Jet Blue to have obtained such a significant market they needed unique marketing. Jet Blue approached and targeted specific markets which they
serviced with certain marketing incentives.
Jet Blue set up its main head quarters in New York's JFK which is one of the biggest airports in the world. This was a strategic plan due to the lack of
domestic flights going in and out of JFK, that minimized there competition which allowed them to continue on a path which led them to there success.
Through targeting specific markets and concentrating their efforts on those markets they gained a loyal

How Tap Portugal Changed The World
As there are various state owned flag carrier, TAP is one of them. TAP Portugal has been the pride of many Portuguese people throughout the world.
TAP is not only the national carrier, but also the vehicle of transportation that brings one to the home country. TAP Portugal like various airlines
throughout the world, has suffered immensely for survival in such a competitive market throughout the years. With 61 years of existence, TAP's history
is quite extensive. TAPPortugal was not the first airline in Portugal. A few airlines had started before World War II, but with the world concentrating on
the ongoing war, civil aviation took a backseat, and many airlines ceased their operations. And then came along a man with a vision,... Show more
content on Helpwriting.net ...
With such a distinguished and impressive career, in 1944 he becomes Director of the Civil Aviation Office.
On 14 March 1945, Humberto Delgado, creates SecГ§ГЈo de Transportes AГ©reos (Air Transport Section), what is known today as TAP Portugal.
(Tap's History, 2016) That same year, TAP Portugal acquires two Dakota DC
–3, leftovers from the World War II. (Coutinho & Rocha, 2013) He saw
the need of connecting the Portuguese colonies, Angola, Mozambique to Portugal. In 1946, after acquiring the two aircrafts TAP Portugal could then
launch two routes. The first commercial Lisbon–Madrid service began on 19 September 1946, while on 31 December, the "Imperial Airline" was
launched, flying between Lisbon, Luanda [Angola], and LourenГ§o Marques [Mozambique], a return journey of 24,540 kilometers that took a total
of 15 days and included 12 stopovers. (Tap's History, 2016) This was the beginning of TAP Portugal. Throughout the years, TAP began expanding
their routes. In 1950's, the jet engine would ultimately revolutionize the airline industry, shrinking air travel time in half by enabling planes to climb
faster and fly higher. (First Jet makes test flight, 2010) With the innovation of jet engines that meant TAP could now fly longer routes, and unite
farther old colonies to the homeland. That same year [1955] Admiral Gago Coutinho made a test flight to Rio de Janeiro. (Tap's History, 2016)
However, before jet engines came to TAP, it would suffer some changes. TAP

Boeing Brief History
History
Looking at the brief history of Boeing, the company was first founded in Puget Sound, Washington in 1916 by William Edward Boeing.
After sucessfully selling military aircrafts adapted for troop transportation in the 1950's and introducing commercial aircrafts model 707, 727 followed
by 737, Boeing has since then become a leading producer of military & commercial aircraft.
After a few number of mergers & acquisitions to become the world's largest, most diversified aerospace company, Boeing enterprise now include: North
American Aviation, McDonnell Douglas, Rockwell International, Hughes Space & Communications, and Jeppesen.
Financial Analysis
1. As you can see from the graphs, over the last three years, Boeing has achieved ... Show more content on Helpwriting.net ...
Morever, these potential new entrants could be deterred from entering the industry as the development of aircrafts can take very long lead times. It can
take about 15 – 20 years to develop a next–generation commercial aircraft and production may stretch out for decades, depending on the no. of units
ordered. This may act as a barrier of entry for potential new entrants. Illustrating the third force which is Power of Suppliers,
There are only 3 main competitors in the commercial jet engine–making industry which operates as an oligopoly. Historically, all of these companies
have competed with each other for jet engine contracts which led to intense price wars. To avert ruinous price wars, these companies typically enter
into exclusive supplier contracts with aircraft manufacturers. In such arrangements, the engine maker becomes the sole provider of jet engines for a
specific aircraft model.
In addition, the big jet engine makers give heavily discounted price, partly to lock in lucrative long term replacement parts, repairs and maintenace
business, thereby reducing the power of these jet engine makers.
On the other hand, for the power of customers,
Airlines usually buy new jets under long–term fixed price contracts. This effectively shifts the financial risk to the aircraft manufacturer as they have no
certainty of the future, thus giving

Virgin America
virgin america
Analysis & Strategic Plan
strategic management 780–634
Michele K. Masterfano, DBA
LeBow College of Business
Drexel University
Summer 2012
Table of Contents
OVERVIEW 1
Fast Facts1
ENVIRONMENT3
Internal Analysis 3
Company Structure3
Company Culture3
Operations & Logistics3
Triple Bottom Line3

SWOT3
External Analysis 5
Competitive Environment5
Summary8
External SWOT Analysis9
Summary13
FINANCIAL 14
FUTURE 15
Potential15
Expansion16
Merger16
Acquisitions16
IPO17
Additional Recommendations17
SUMMATION18
REFERENCES19
Virgin America was founded by serial... Show more content on Helpwriting.net ...
Using Michael Porter's "Five–Forces" model it is possible to gain an understanding of where Virgin stands in relation to the competition and how it can
adjust to increase its competitiveness. The diagram below is a graphical representation of Porter's model.

Threat of New Entrants
1. Threat of Foreign Carriers – Many large foreign airlines are expanding their reach to new market segments that are likely to encroach on Virgin's
market share. Emirates air, Cathay Pacific, and Qatar airlines have all been successful at stealing market share from their US competitors on domestic
and international routes (Mayerowitz, 2008).
2. Low Cost and Regional Airline Startups – Companies like Jet Blue, Ryanair (European), and EasyJet (AirTran) are all LCC's that have potentially
devastating effects on market share for larger more expensive airlines (The Economist, 2004).
Bargaining Power of Suppliers
1. Fuel Companies – Fuel is one of the airline industry's largest variable costs (on average 40% of their budget). Aside from hedging or put and call
options, which can backfire, airlines are at the mercy of fuel companies and have very little bargaining power (Hargreaves, 2012).
2. Aircraft Manufactures – Manufacture rates are typically discounted by

As part of marketing in business, strategy is a leading...
As part of marketing in business, strategy is a leading light because it is a plan of action designed and followed by businesses to become successful.
Three companies in the same industry can offer similar products in a completely different ways. Branding is everything and understanding what
customers want determines a company's brand position. Airline companies are great examples of numerous companies offering the same product.
Major differences in brand and quality management come when comparing three airline companies that offer the same product such as Spirit Airlines,
Jet Blue and American Airlines. Although their product is the same, the processes to marketing their product are completely different. Spirit Airlines is
an... Show more content on Helpwriting.net ...
As of October 2013, JetBlue serves 84 destinations in 24 states, and 12 countries in the Caribbean, South America and Latin America. JetBlue is one
of the largest airlines in the Northeast United States. In 2007, USA Today reported that JetBlue planed to enter into a partnership with Irish flagship
carrier Aer Lingus. The alliance will facilitate easy transfers to both airlines' customers, but will not allow either airline to sell seats on the other
airline, unlike traditional code share alliances, meaning customers must make individual reservations with both carriers, the newspaper said. With a
goal of improving flight experience, JetBlue became the first airline to offer all passengers personalized in–flight entertainment. In 2000, flat–screen
monitors were installed in every seatback which allows customers live access to over 20 DIRECTV channels at no additional cost. American Airlines
serves four continents, trailing Delta Air Lines and United Airlines, which both serve six. This company has been in the industry for 69 years. It is
one of many airlines that have played an important part in the history of air transportation in the United States. Starting as a mail company called
"Aviation Airways", which carried bags of mail from Chicago to St Louis is how this company began to rise. In 1934 American airways became
American Airlines, Inc. A few years later it

Ww2 Impact On Aviation
Aviation had an enormous impact on World War 2 (WW2) and the war had a great impact on Aviation. The cost of aviation during WW2 was
staggering. Before the war started America had about 300 air transport aircraft. During WW2 there were approximately 276,000 air planes produce.
Of that number 14,000 of them were lost in the US during testing and training. Approximately 43,000 of them were lost overseas (Engel, 2011). After
the war American had to change its focus, to quality, and people instead of cargo. Because during the war mass production was the goal, and the ability
to move mass amounts of equipment and soldiers. With all the advance that had been made overexpansion became a cost. Too much too fast and not
enough buyers. Especially,... Show more content on Helpwriting.net ...
It found that is 707 did three times the work of a single piston DC–6 at only double the operating cost. (Bright, 1978) Because of the governments
withdraw of subsides, Boeing found a way for indirect government funds for the development and tooling costs of its jet airliner. The president of
Boeing saw the US Air Forces need for a tanker, and thought the 707 would be the prefect design. He was able to persuade the Air Force that the
707 could be turned into KC 135 and produce on the same line and would save money. Revenue from passenger miles grew in the early to mid '50's at
a rapid rate. With these higher revenues the airlines had more spending power throughout the Korean War time frame. They used these earnings to
purchase more piston planes, because of the skepticism and high cost of the jet engine. Other manufacturers did not find the same success as Boeing,
too much indecision and they did on see the potential in jets. At the time they were satisfied with the profits they were making with their piston
engines. This put them behind in the development process. Once they decided they had no choice but to move on to jets, it cost them much more
because of Boeing's lead (Bright,

How Is the Economic Downturn Affecting the Airline Industry?
EXECUTIVE SUMMARY
пЃ¶Stagflation in US economy threatens outlook for the airline industry profitability. US airlines forecasting Q108 losses citing high fuel costs and a
potential economic slowdown.
пЃ¶Other regions of the world will expand such as Asia, Middle East and Latin America.
пЃ¶Slowdown has already affected some US small–mid cap carriers with the recent onslaught of bankruptcies.
пЃ¶US majors are better armed to combating the effects of the sharp increase in jet fuel. Cost reduction initiatives have been announced.
пЃ¶Slowdown in the US economy is expected to accelerate consolidation talks between the majors.
пЃ¶Cash cushions at most US majors from a profitable 2007 will help them in the short–term. Financial ... Show more content on Helpwriting.net ...
Merged airlines will produce a combined cash balance of $7 billion upon consummation, the best cost structure and debt–to–income ratio in the industry,
and access to financial markets.
п‚§The combined airline's fleet will comprise 800 mainline aircraft and 600 regional aircraft. It will be the largest operator of A330s, B757s and
B767s, a balance of Airbus and Boeing widebodies that is expected to continue going forward. Additional aircraft orders will not be made unless it
makes fiscal sense and the merger is "about addition, not subtraction" and "is not predicated" on hub closures, involuntary furloughs or big capacity
reductions.
пЃ¶Cash cushions at most US majors from a profitable 2007 will help them in the short–term. Financial impact of slowdown could be delayed to 2009.
Cash cushion helps big airlines for now
п‚§The nation's biggest airlines have saved some $19B in cash as of the

The History Of Delta Airlines
Andrew Trentmann Professor Weiland ASCI 602 19 November 2016 The History of Delta Airlines Delta Airlines originally started in 1924 as, Huff
Daland Dusters, the first crop–dusting company in existence (History, n.d.). To avoid the lulls of winter, when no crop dusting was performed in the
U.S., Huff Daland extended its dusting services to Peru (Hoogerwerf, 2010). Peruvian Airways, a Pan–Am subsidiary, began flying both passenger and
air mail contracts for Huff Daland in its first entry into the passenger market (History, n.d. and Hoogerwerf, 2010). Due to the unstable political
environment in South America, this portion of the company was sold, and the U.S. portion of Huff Daland Dusters was bought from its parent
company (Huff Daland Manufacturing Company) by a group of investors with C.E. Woolman placed as the vice president and manager of
operations (History, n.d.). During this buyout from its parent company Huff Daland Dusters became rebranded as Delta Air Service. (History, n.d.).
With Woolman running the company and going on to eventually become President and CEO, Delta Air Service began its first passenger route in
1929 flying from Dallas to Jackson (History, n.d.). In 1930 the inability to secure airmail contracts by being excluded from the "spoils conference"
caused Delta to temporarily stop passenger service and fall back on agricultural spraying (History, n.d. and Hoogerwerf, 2010). In 1934 Delta Air
Service, as a result of the Black–Mckeller Act, received a

Southwest Airlines
Southwest Airlines
Over 35 years ago, Rollin King and Herb Kelleher decided to create a different type of airline. They began with the simple notion: If you get your
passengers to their destinations when they want to get there, on time and at the lowest possible fares, and make darn sure they have a good time doing
it, people will fly your airline. They were right (Southwest Airlines, 2004)!
What began as a small Texas airline has grown to become one of the largest airlines in the United States. Today, Southwest Airlines flies over 70
million passengers per year to more than 62 cities. Southwest orchestrates over 3,000 flights per day. The Southwest fleet consists of over 436 jets
which have an average age of nine years old. Included in ... Show more content on Helpwriting.net ...
(p.2)
In 1984, for the fourth consecutive year, Southwest was ranked the number one in Customer satisfaction. Spirit, the in–flight magazine, celebrated its
13th year of flying high and Southwest unveiled the first 300 series aircraft in its Boeing 737 fleet, it was christened the "Spirit of Kitty Hawk".
Services to the Midwest cities of St. Louis, Missouri and Chicago, Illinois were added in 1985. The Ronald McDonald House was named the primary
charity. Southwest Airlines was established as the most convenient point–to–point carrier nationwide with the launching of the "Just Say When"
campaign (p.3). In 1986, Southwest celebrated 15 years of low fares, good times and high spirits! Fun Fares were introduced with over 13 million
passengers having flown Southwest. In 1987, Southwest celebrated the sixth year in a row as the recipient of the Best Consumer Satisfaction record
of any continental U.S. carrier. The prices of Fun Fares were reduced by up to 25% and Weekend Fun Packs (which includes round trip airfare and
hotel) were introduced. By doing it smarter, Southwest Airlines does it faster, cheaper and has more fun than any other airline! In 1988, Sea World of
Texas and Southwest teamed up to promote the State of Texas as a major tourist attraction. Through the "New Friends" campaign, Sea World of Texas
named Southwest as its official airline and

Causes And Effects Of 9 / 11
It is the morning of September 11, 2001, it is just a normal sunny day in New York City. All of a sudden a commercial airline is seen flying low to
the ground on the horizon. Boom! The city starts to shake. That commercial airline has crashed into the World Trade Center. The tower is engulfed
with flames, many of the people at the top of the tower are stuck. This Tuesday morning will change the lives of many people. After this horrific attack,
a terrorist organization known as Al qaeda took responsibility for the attack a month or so later. The steel frames of the buildings lost some of their
structural strength from the burning of the jet fuel when the planes hit. The support beams in the tower were cut by the commercial airplane which was
another factor to the collapse of this building. These three points prove why 9/11 was a catastrophic event, that should be known as the destruction that
came from a terrorist organization which used commercial airlines to destroy their targets.
On that morning of Tuesday, September 11, 2001, a tragic accident occurred. There were 2,753 victims from the collapsing of theWorld Trade center.
Only 60% of those victims have been identified. The group responsible for this event was a terrorist organization known as Al Qaeda. Al Qaeda is a
terrorist organization from the Middle East based in Afghanistan. Al qaeda had a small relation to the United States during this time because they
wanted the United States to get out of the affairs in

Potential Analysis of Jet Blue: A Case Study
Part 1 Overview and Fiscal Analysis – One of the prime examples of the new paradigm in the airline industry is Jet Blue, an American low–cost,
no–frills airline. Its main base is JFK international airport in Queens, NY. The airline's main destinations are U.S. hubs, flights to the Caribbean and
Bahamas, and some to Central and South America. It is a non–union airline with a fleet of just under 200 craft, with another 50 ordered. The primary
strategy for Jet Blue is the customer value proposition. The airline is not fancy, does not try to offer a number of amenities, only has a few routes, and
is primarily trying to base ridership on low–cost fares. Revenue for 2011 was $4.5 billion, with operating income of $322 million and net income of
$86 million. The company has a total of over $7 billion in assets showing that 2011 was a good year for the airline, even though revenues were slightly
lower than the previous year (Jet Blue Annouces 2011 Annual Profit, 2012).
Part 2 Resource Analysis– The company uses unit level activities and manages these by choosing to maintain high aircraft utilization (operating a
single aircraft type with a single class of service) and direct booking services save computer reservation fees (use of www.jetblue.com) which lowers
operating costs. It uses batch level resources by using a uniform type of aircraft, in which the staff need only become an expert once not many times
over.
Part 3 External Environment – Airlines, particularly smaller

American Airways Internal Environment
The main business of AMR Corporation's is in the commercial aviation industry. AMR was founded in 1930, named American Airways Inc. due to
many smaller companies acquired in a consolidation. It operates wide range of international and domestic network of flights which pass from North
America, the Caribbean, South America, Europe, and Asia. Their headquarter were in New York City but later in the year 1979 was moved to Forth
Worth Texas due to their expanding business. They are known as one of the leadingairline in the world which gives a big support to the US economy
by providing many daily flights around the world. Many big corporations look up to American Airlines as a way of major income for them. They are
mostly known for being the parent company for American Airline.
AMR Corporation is one of the biggest corporations who has managed to have successful merger to stabilize their cost and increase their profits even
in era of recession and has a significant visibility. As a well–known company they decide to go public in 1939. The name AMR Corporation ... Show
more content on Helpwriting.net ...
This is to provide excellent service to their customers and to improve communication with their passengers. Global One Alliance has been able to
share and occupy other airlines assets and is made up of about 20 of the biggest worldwide airline. This wonderful networking has leaded them to
agreements with major airlines in other countries which gave AMR even wider range to allow passengers to travel. On November 29, 2011 it filed
for Chapter 11 reorganization bankruptcy. It has cut down many jobs and reported operating cuts to increase its revenue. This gave a negative swing to
their fast growing business. AMR Corporation handles the situation very respectably because of that within two years once again they uproar as the
strongest competitor for their rivals by merging with US airways in

Southwest Airline
2. SWOT Analysis
2.1 Strengths
1) Focus on point–to–point service. This service provides more direct nonstop flights that can minimize delays and total trip time.
2) Low operating costs
– Use a single type of aircraft (Boeing 737) that makes scheduling, operations, maintenance, and training more simplified.
– Outfit the fleet with fuel–saving, performance–enhancing blended winglet that extend flight range, save fuel, and reduce engine maintenance costs
and takeoff noise.
– Fuel cost saving. Southwest effectively takes advantage of fuel hedging to buy fuel at lower prices. And to cut fuel cost Southwest also takes some
other actions such as carrying less water for bathroom, and replacing passenger seats with lighter models.
– ... Show more content on Helpwriting.net ...
If there is competition on the routes, the monetary cost and time it takes to switch form one airline to another is low. This also intensifies the rivalry
among current competitors.
Other factors contributing to rivalry include enormous fixed costs, excess capacity, low differentiation, price wars. And the exit barrier for airline
industry is also very high.
3.2 Potential Entrants
Because of the deregulation of the government policy, there are a number of new airlines that entered the industry at first. However the most significant
barrier to entry that new entrants face is significant post–entry competition from existing major airlines. The existing market is already saturate. In
order to open market the new entrances have to lower the price of their limited routes. But they are facing the stronger competitor who can provide
lower price on the same routes while create profit on the other non–competing routes.
Another barrier the new entrances have to confront is the high capital requirement. The airline industry is tremendously capital intensive.
3.3 Bargaining Power of Suppliers
In airline industry there are three major suppliers; jet–fuel providers, airplane manufactures and labor. Due to the current economic situation and
ever–increasing fuel price, the position of the airline industry to its jet–fuel suppliers is worse. While the power of jet–fuel suppliers is stronger, the
influence of airplane manufacture and labor on the airline

Jet Fuel Cost
Today's aviation industry is considered to be more robust then ever before. On most days, upwards of 100,000 flights across the world depart,
delivering goods and servicing for travel. Passengers worldwide are finding air travel to be fast, reliable, safe and relatively inexpensive. While flight
in itself remains the same, aircraft manufacturers are constantly looking for ways to improve such factors. Unfortunately, in today's worldwide climate,
there are several items which have a direct impact on ticket pricing. These items include taxes and fees, fuel cost, and ticket sell's. Furthermore with the
increased sophistication of aircrafts today, cost to purchase, maintain, and operate such aircraft are significantly more than years past. However,... Show
Also, because Avgas (100ll) contains a small amount of lead, shipping cost's are significantly higher. Since Avgas (100ll) contains lead, according
to Viser (2014), "no common carrier pipeline in the US will allow it. This means that it must be shipped by rail or truck" (para. 9). By comparison,
the cost to ship 4,000 gallons of Avgas (100ll),1000 miles via rail or freight, cost several thousand dollars. However, Jet fuel shipping cost would
only exceed a few cents, via pipeline. Also because FBO's are scattered across America, access and storage are limiting, causing fuel cost to remain
high. In comparison, the nationwide average of Avgas (100ll) cost $5.22 per gallon and the average nationwide cost of regular gasoline is $2.74 per

Southwest Airlines Profitable
Southwest Airlines Fuel Hedging and Relations to Profitability
Abstract
In order to stay airborne, a passenger airline has to consistently generate profits. Profits come only from paying passengers, hence all stratagems
must be customer oriented. In a scenario where there are many airlines competing with each other, one way of attracting passengers is to keep the
cost of flying low, while providing value for money. On the other hand, expenses must tightly controlled to reach and stay at the lowest possible.
Certain expenses are unavoidable; however, one variable that can be kept low through decisive planning and foresight is the cost of fuel, which, at
best, can be called volatile. A good way to achieve this is by hedging fuel cost,... Show more content on Helpwriting.net ...
Fuel has consistently been one of the largest expense categories for domestic airlines, ranking second only to personnel expenses. During 2003, fuel
costs represented, on average, over 16% of the total operating expenses for all U.S. domestic airlines studied by Richard Cobbs and Alex Wolf
(2004). Moreover, airlines are generally unable to increase fares to offset any significant increase in fuel costs. From 2001 to 2003, these same airlines
experienced a 25.9% compound annual increase in jet fuel costs while average airline pricing decreased by 0.1%, as measured by revenue per
available seat mile (Cobbs and Wolf, 2004). Jet fuel costs have substantially risen over the past several years putting consistent pressure on airlines to
maintain positive cash flows. Any saving in fuel costs works out to profit earned.
In fuel–intensive arenas such as the Airlines Industry, high and volatile fuel prices can have a significant impact on the bottom line, not to mention
adding to the difficult task of budgeting for future fuel expenditures. If fuel costs are not actively managed, they can lead a company into losses.
Airlines can mitigate their exposure to volatile and potentially rising fuel costs, as well as natural gas and electricity costs, through hedging. Hedging
allows the fuel market participants (companies that consume large

Southwest Airlines : History Of Northwest Airlines
I.Introduction
A.History
Two Texas businessmen, Herb Kelleher and Rollin King, created southwest Airlines in the summer of 1971 ("History Of Southwest Airlines."). The
company initially started off by only providing services to passengers travelling within the state of Texas to the cities of Dallas, Houston, and San
Antonio ("History Of Southwest Airlines."). Southwest quickly expanded after experiencing rapid success in those three cities and they now service 96
different destinations in 41 different states as well as Washington D.C. and Puerto Rico (Southwest Corporate Fact Sheet– Corporate Fact Sheet –
Southwest Airlines Newsroom."). One of the reasons that they became so popular so quickly was their creation of the frequent flier ... Show more
content on Helpwriting.net ...
Tickets are only available for purchase through their company website. A search on any of the large travel websites such as Orbitz, Travelocity, or
Kayak would return no results for Southwest flights. By controlling every facet of operations and ticket selling, it has enabled the company to offer
lower prices than their competitors. This strategy of low fares paired with a focus on outstanding customer services, has made Southwest into the largest
airline company in America. The company also boasts the largest fleet of Boeing jets in the entire world.
B.Present Conditions
Southwest just recently made an effort to become more of an international company. In 2011, they bought outAirTran Airways, and have been working
the past few years to fully integrate AirTran and Southwest into a company that is one and the same. Beginning on July 1, 2014, Southwest began
offering international service to Cancun, Mexico City, Cabo, Aruba, Montego Bay, Nassau, and Punta Cana (Southwest Corporate Fact Sheet–
Corporate Fact Sheet – Southwest Airlines Newsroom."). These international flights are the first by the company but likely won't be the last. In
addition to adding international flights to their flight schedule, Southwest has also been trying to shift away from the low fare reputation that
customers and competitors associate with the

Swot Analyses for Tui
Porters five forces for Expedia
Chapter 1 – American Airlines * PEST Analysis
The utilization of a PEST analysis with regard to American Airlines takes into account the political, economic, social and technological (NetMBA,
2004) environment the industry is embroiled in and how this has, is and will threaten to impact its operations and profitability. It must be remembered
that the number of possibilities concerning macro–environmental aspects is almost limitless, thus concentration will be paid to those areas perceived to
have the highest impact. * Political
The political stability of the United States was severely shaken by the terrorist events of September 11, 2001, and this directly resulted in a
catastrophic drop in ... Show more content on Helpwriting.net ...
In the airline industry the excess supply has been attacked by low–fare carriers who have continually gained market share.
–––––––––––––––––––––––––––––––––––––––––––––––––
Top of Form
Order Now. It takes less than 2 minutes. 1. * Name 2. * Email 3. * Phone 1. * Your essay question
(please give as much detail as possible)
Bottom of Form * Buyer Power
The airline industry suffers from oversupply as well as fixed costs which served as the foundation for low fare carriers who offer no frill flights in
return for discounted fares. This approach effectively pulled the casual traveler and spread to frequent travelers and some classes of business travel for
companies seeking to cut costs. Buyer demand is re–shaping the airline industry as a result of these options. * Supplier Power
In terms of this category, fuel is the single largest airline cost expenditure item which affects all firms equally. Low Fare carriers by eliminating frills
lower their per flight operating costs which have and is attracting scores of travelers to their fold. * Barriers to Entry / Threat of Entry
Traditionally, the high cost of entry in the airline industry reduced the treat of entry by competitive companies. However the business model offered
by low fare carriers exploited the lower end segment of the market via price and provided a foundation for

General Environment Analysis of the Airline Industry
The U.S. airline industry has been in a chaotic state for a number of years. In 1993, a U.S. government report indicated that the industry had "Lost huge
amounts of money in the past three years, and it has never made a sustained, substantial return on investment..." According to the Air Transport
Association, the airline industry trade association, the loss from 1990 through 1994 was about $13 billion, while from 1995 through 2000, the airlines
earned about $23 billion and then lost about $35 billion from 2001 through 2005. Early in 2006 the association expected about a $10 billion loss in
2005.
In 1903, the Wright brothers ' first successful flight in Kitty Hawk, North Carolina marked the beginning of the aviation industry. In the early... Show
Through these agreements, airlines can share facilities and operational costs (e.g., maintenance facilities, sales offices) and negotiate volume discounts
on large purchases. Passengers benefit from lower prices (due to lower expenses) as well as optimized routes and pooled loyalty rewards, especially in
regards to international travel. Since the deregulation of the airline industry began, airline ownership has been limited to companies and individuals of
the operating country. Consolidation is beneficial in two ways for airline companies, as it typically reduces redundant operating costs and raises
revenues through higher fares.
The airline industry can be separated into four categories by the U.S. Department of Transportation:
International
130+ seat planes that have the ability to take passengers just about anywhere in the world. Companies in this category typically have annual revenue of
$1 billion or more.
National
Usually these airlines seat 100–150 people and have revenues between $100 million and $1 billion.
Regional
Companies with revenues less than $100 million that focus on short–haul flights.
Cargo
These are airlines generally transport goods.
Michael Porter's Five Force
Rivalry Among Competing Firms
The most powerful of the five competitive forces, the strategies pursued by one firm can be successful only to the extent that they provide competitive

External Environment Of Southwest Airlines
When it comes to the external environments of Southwest airlines there are many things to consider. The general environment and the industry in
general are thing to consider. A major challenge that must have due consideration is competition. There are many aspects of the general environment.
Demographic, technological, economic and political/legal are a few. There are seven concepts that make up the general environment analysis. All
together they show what Southwest is all about. Southwest's demographic trend favors two types of travelers, the time oriented and the cost efficient
travelers. The time oriented are mainly business related travelers. They are using doing a short haul type of flight. The cost efficient travelers are
mainly leisure type travelers such as one's going on vacation. Both of these travelers prove that southwest main objective is cost and time efficient
traveling. When it comes to technology, Southwest has been using antiques, but Southwest is fixing to change that. According to the Dallas Morning
Times, "new domestic reservation system will replace 30–year–old technology this year, giving southwest the same ability as rivals to accept foreign
currency, recover faster from storms, and more easily change prices and schedules."(DallesNews.com) Along with the new reservation system will
come virtual tickets. Southwest's will do away with paper tickets for people using employee's guest passes. Thus, Southwest has started to update their
technology.

5 Ages of Hospitality
HM–1800| The Five Ages Of Tourism | |
Introduction: The 5 Ages of Tourism In our current era, travel requires nothing more than a computer and a couple hundred dollars in the bank.
Anyone can simply get on a computer and buy a ticket for the next day to go anywhere in the world he or she wants. Travel has never been faster or
more convenient as it is today, and that convenience is what leads to tourism. Tourism is the largest industry in the world when all of its subgroups are
combined; it is difficult to come up with one definition for tourism, but it can be looked at as: The commercial organization and operation of vacations
and visits to places of interest, or as listed by the World Tourism Organization: a... Show more content on Helpwriting.net ...
Ford's invention the assembly line made it possible for him to mass produce Model –T at a cheap rate. In 1908 the first Model–T debuted at $825, and
4 years later dropped to 575. These extremely economical prices turned the automobile from a luxury item to a staple in American society. People
were now allowed to travel at will anywhere they wanted, perpetuating the tourism industry more than any other age. Road side Inns, resorts and
attractions specifically for tourist increased tremendously after the mass ownership of automobiles. After conquering all forms of ground travel, man
had some ambitions to take to the sky, thus came the Jet Aircraft Age. Wilbur and Orville Right were the first people to take flight, but their invention
was not directly correlated with the commercial flight seen today. Two engineers, Frank Whittle of the United Kingdom and Hans von Ohain of
Germany, developed the jet engine during the late 1930s. The first jet engine powered commercial airliner was introduced by the British Overseas
Aircraft Corporation (BOAC); the 36–seat plane named Comet, flew for the first time on July 27, 1949. With the invention of jet aircrafts, exotic
resorts can be made accessible, business can be made international, and cheap rates make it easy for the average citizens to explore the world. The last
and most recent travel development is The Cruise Ship Age. Modern cruising is the

American Airlines Executive Summary
Executive Summary/Abstract American Airlines is looking to expand its market to more wealthy consumers by offering an excusive line of aircraft
consisting mostly of first class and business type seating. This new model will be labeled under the title "Elite" and would market routes to and from
major city hubs during heavy business traveling hours. American Airlines will position this service as the, "Black Jet" since that would be the standout
feature of the aircraft. American can take advantage of its existing market base along with its frequent fliers to sell the experience of a flight experience
beyond maximizing passengers. The target motto would be a "flight redefined." American Airlines Elite would target business, first class, and frequent
flying travelers. The Primary marketing objective is to achieve a 4–7% increase in fares per route flown by the increase of ticketing prices even with
fewer seats on the aircraft. Status matching will be offered to competing airline frequent flyers to encourage them to travel more with American than
their current choose airline. Airlines represents a $783 billion a year industry (Fact Sheet: Industry Statistics, 2014). Being able to expand the market to
the high–end segment would create an attraction to a unique service not offered by other major US airlines. Break even cost would be the first year
goal while there would be an increase in cost to retrofit aircraft.
Positioning Statement To excusive level travelers

Essay on Alaska Airlines Social Responsibility Project
| Alaska AirlinesStrategic Corporate Social Responsibility Project| | | | Company Report 5/3/2012| | |
ALASKA AIRLINES
Strategic Corporate Social Responsibility Project
Mission Statement:
The mission and vision of Alaska Airlines is that employees share an uncommon blend of integrity, professionalism, caring, resourcefulness, and spirit.
Every day they strive to bring these values to life through behaviors and deeds that go above and beyond the ordinary. They call it "North of
Expected" and Alaska spirit in action.
Vision Statement:
Stay in closer touch with all the customers–with new technology to quickly tailor communications, marketing promotions and operations in ways that
build strong, long–term ... Show more content on Helpwriting.net ...
During 1997, Alaska Airlines was the 10th largest US airline carrying over 12 million passengers a year.
2000–s – The airline began buying new 737–700 and 900. The transition to the new Boeing 737 fleet meant great fuel saving and other efficiencies
and respect to environment. On February 16, 2012, Alaska Airlines' CEO, Bill Ayer, announced that he would be retiring. He became the airline's
CEO in 2002 and has been credited for reducing costs and keeping the airline profitable without going through bankruptcy. The airline's president Brad
Tilden will officially become the new CEO on May 15, 2012.
Product/ Services
Flights: The Alaska Airlines goal is to always provide safe, reliable transportation for a reasonable price, along with the caring, friendly and
professional service. Alaska Airlines has proven itself as a leader in North American travel. Every year Airlines extend their network by adding new
flights. They began new service from San Jose to Palm Springs, CA, from Seattle to Kansas City, MO and from Portland, OR to Long Beach, CA. In
April 2012 opened new nonstop flight from California to Hawaii. Alaska Airlines serves 96 destinations; it has 571 daily departures in the United
States, Mexico and Canada. Major regions/ Average daily departures
Lower 48 States 295
Alaska 97

Hawaii 22
Canada 5
Mexico 13
During The Flight:

Relationship Of Etihad Airways
Airport and airline relationship of Etihad Airways
Etihad Airways is committed to the growth strategy of cooperation to get the scale needed to compete in the global air transport market. Beyond
organic developments, the airline has a strong base of code–share partners, offers access to hundreds of destinations that are not served by its own
aircraft. In 2013, Etihad Airways has signed a new code–sharing agreements with seven airlines – South African Airways, Kenya Airways, Air Canada,
Korean Air, Air Serbia, Belavia and airBaltic. Code–sharing refers to a practice where a flight operated by one airline is jointly marketed as a flight for
one or more other airlines.
This addition takes the number of code–sharing partnership to 47 by the end of this year. Among the... Show more content on Helpwriting.net ...
This represents an increase of 30 percent over 2012, and 21 percent of total revenue this year for Etihad Airways, which was reciprocated by donating
passengers and goods to the company aviation partners. In the case of equity partners, the benefits are even greater, significantly reducing unit costs
and operating expenses through activities including the sharing of resources and joint procurement. In 2013, Etihad Airways operated a number of
services using a fleet of aircraft from Jet Airways, Virgin Australia and Air Seychelles will also provide a set of partners including Air Seychelles and
Air Seychelles to meet short–term needs. Etihad Airways airberlin surplus hired 50 pilots and shared new office facilities in Germany with Air Berlin,
provides training for pilots and cabin crews from several partner airlines and participate in joint sales and marketing activities with several partners
worldwide. Etihad Airways also extend the benefits of its equity relationship by connecting companies to cooperate with one another, and also to
integrate the company's partner in Etihad Guest loyalty

Financial Statement Analysis Of Jet Blue Airways...
Financial Statement Analysis – Jet Blue Airways Corporation (JBLU)
Summary of the Company
Jet Blue Airways Corporation, a passenger transportation company that provides "93 destinations in 28 states in the United States, the District of
Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, and 19 countries in the Caribbean and Latin America" (Yahoo Finance). Jet
Blue Airways Corporation is based in Long Island City, New York.
Financial Ratio Analysis
After computing the current ratio of Jet Blue Airways, there was a decrease from 2014 of 0.62 to 0.60 in 2015. This was a result of an increase of
current liabilities that superseded the increase of current assets. The decrease in ratio between the respective years denote the inability for the
company to pay off its most recent debts within a short period of time. Jet Blue current ratio falls extremely below the average among the airline
industry of 0.81 (CSI Market). In 2015, Jet Blue Airways' acid test ratio showed a slight increase to 0.45 from its former 0.44 rate in 2014.
Consequently, the company's increased ability to pay off its debt with its most recent assets. Combined the acid test ratio and the current ratio, shows
that the even though Jet Blue had a decrease in the current ratio, is had a much higher immediate liquidity status due to the fact of a 52% increase in
short term investments. In addition, Jet Blue Airways experienced a 9% increase from 43.7 to 47.2 in its ability to convert its receivables

Case Study Of Etihad
INTRODUCTION:–
November 20, 2013 was a historic day for the Indian aviation industry after Jet Airways (India) Limited ("Jet" or "Target") and Etihad Airways PJSC
("Etihad") concluded about much talked issue of about US$ 379 million investment by Etihad to acquire a 24% stake in Jet ("Deal").
In addition to the equity investment, Etihad also agreed to infuse US$ 150 million into JetPrivilege, the frequent flyer program of Jet, to be
managed by its subsidiary, Jet Privilege Private Limited and also provide or arrange for a loan of US$ 150 million to Jet. Earlier in January 2013 of the
year, Etihad had purchased 3 slots owned by Jet at the Heathrow airport in London for US$ 70 million.
The saga of the Jet–Etihad deal had been in so much ... Show more content on Helpwriting.net ...
In 2013, Etihad, a company incorporated in the United Arab Emirates (UAE), a national airline of UAE, proposed to acquire 24% in Jet, a listed
company incorporated in India. Etihad is wholly owned by the Government of Abu Dhabi and is primarily engaged in the business of international air
passenger transportation services, commercial holiday services and cargo services. It is also stated to hold 29.21 percent equity in Air Berlin; 40
percent equity in Air Seychelles; 10 percent equity in Virgin Australia and 2.9 percent equity in Aer Lingus. Jet on the similar lines, is primarily
engaged in the business of providing low cost and full service scheduled air passenger transport services to/from India along with cargo, maintenance,
repair & overhaul services and ground handling services. The proposal got approved by the Security Exchange Board of India (SEBI), the Foreign
Investment Promotion Board (FIPB) and Cabinet Committee of Economic Affairs (CCEA). Thereafter the Investment Agreement, Shareholders
Agreement and a Commercial Cooperation Agreement between Jet and Etihad were submitted to CCI for its approval. This has been considered as a
landmark case in the aviation sector, as CCI examined the details of the impact caused by the deal on air passenger services and consequently on
competition in

Braniff Airways: Factors Leading To The Deregulation Act...
Introduction Style. Class. Color. These words best describe one of the most successful airlines of the 20th century. Braniff International Airways
began as a small commuter/airmail company and grew into the worlds most prestigious airlines in the 1950s and 1960s. Braniff was bold in its
quest to revolutionize the airline industry, however, many factors contributed to the bankruptcy of Braniff Airways in 1982. How could such a
large airline go from successful to bankrupt in just a few years? The largest of these factors were the Deregulation Act of 1978, the Energy Crisis of
1979, and poor business decisions following deregulation. These two external factors will be discussed following a brief history of the airline.
History and Innovation Braniff Airlines started in 1928 as a route between Oklahoma City and Tulsa, Oklahoma, but this company was quickly
purchased by the holding company Aviation Corporation. The Braniff brothers saw how quickly the airmail contacts were growing and they started
another company to bid for airmail routes in the early 1930s. This airline was called Braniff Airways and was the true beginning to the airline that
flourished in the mid to late 1900s. Braniff Airways also began with a route between... Show more content on Helpwriting.net ...
This crisis was the result of the Iranian revolution (which in–turn began the Iran–Iraq war), which at the time was one of the world's largest suppliers of
fossil fuels. This caused mass hysteria in energy sector and oil prices spiked in the world economy. Since airlines are heavily dependent on oil
market prices, the industry took a large hit. Braniff saw a 94% increase in fuel prices in 1979 alone (Nance, 1984). This exorbitant hike in costs hurt
Braniff badly and is the prime reason for the tremendous financial loss the company had been experiencing. In addition, a natural recession was taking
place during the late 1970's which only hurt Braniff

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