Financial Issues Faced By Delta Airlines

Financial Issues Faced By Delta Airlines
The case represents the competitive issues faced by a creative, innovative, and a well–established airline, Delta Airlines Company, which had
successfully earned a reputable name in the airline industry with all its significant efforts. The company started its operations in the year 1928 and
with the help of strong and effective leadership, the company successfully gained access to new routes, which ultimately resulted in the increased
revenues for the company. The industry is filled with the number of competitors including the low cost carriers as well as the legacy carriers.
However, the company is one of oldest company in the industry, which significantly helps in recovering from the major challenges occurred in the
overall economy. The company over the years had a strong focus on the customer's satisfaction that helped in the recovery of US FederalAirline
Deregulation Act in 1978, which was coupled with recession in early 1980s. Both the issues have negatively affected the overall industry in form of
heavy losses. From the financial analysis, it can be seen that underlying company in this report with effective management, turned to profitability in
1990s.
The competition in the airline industry is intense due to which Delta constantly faced challenges in terms of economic downturns, and competition
especially from low cost carriers (domestic) rather than the legacy carriers. One of the alternative solutions available with the company is to launch its
own low–cost
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British Airways And Ryanair And The Airline Industry
Introduction
In today's business world, Aviation industry is frequently developing rapidly in order to compete among each other and survive in the larger markets
leading to aggregate competition between low cost/no frills carriers –LCC and the more traditional full service carriers–FSC (Hunter: 2006). Due to
rapid development, consumer trend tend to improve in the market because flying on mainstream carriers was no longer cost–effective, therefore, low
cost carrier was introduced (Whitelegg: 2005). Subsequently, operation strategy is fundamental to the success of the businesses. Slack, Brandon–Jones
and Johnston (2013) defined operation strategy as " The pattern of strategic decisions and actions, which set the role, objectives and ... Show more
content on Helpwriting.net ...
Ryanair incorporated at no–frills, low–cost, quick to reach consumers destinations in a much modernized aviation industry. For instance, it is more
cheaply, and more reliable, than any other airline including British Airways. They do not compromise on safety, top–drawer punctuality, near perfect
baggage handling and efficient 'green' policy. The target markets of this particular airline are those who compromises on comfort and fare conscious
customers. For example: Students, low–income earners, busy businessmen, and family (Ryanair.com). On the other hand, British Airways strategy is
to become the world's leading global premium airline by making cost that is base more efficiently and focus on outstanding customer service, which is
a critical part of their strategy. The 5 strategy goals are to be the airline of choice for long haul premium customers, deliver and outstanding service for
customers at every touch point, grow their presence in key global cities, build on the leading position in London and meet customers' needs and
improve margins through new revenue streams (British Airways PLC .com). The target market of British Airways is leisure travellers, consumers who
want comfort and cost is not an issue (marketingmagazine.co.uk). Both aviation companies are customers based but they do differ from each other in
their operation strategy.
Business models
Business models such as strategy, network, fleet,

Jetblue Case Study
JetBlue and Song: Competitive Rivalry between Low–Cost Carriers
Case Analysis 2
Kathleen Quicho
Prof. Rosalinda B. Lacerona
Faculty, MGE 11A
Time Context
2013 (Present)
JetBlue is a United States domestic airline company who operates on a low–cost principle which translates into cheaper airfares to its customers. In
February 2007 JetBlue underwent a particular event that could have been its last. Since its beginning in 1998 JetBlue became the 11th largest company
in the industry within six years. Aside from Southwest airlines, JetBlue was the only company who had been able to keep its books positive while the
United States had undergone a terrorist attack and all other companies were reporting loses.
Song airline was ... Show more content on Helpwriting.net ...
* PASSION: Strive to meet the diverse needs of Crewmembers and Customers; Champion team spirit; Crave and deliver superior performance; Enjoy
overcoming barriers to good service; Look for innovative solutions to business issues.
I. Statement of Objective * To be able to distinguish each of the two company's competitive edge against each other * To be able to know the different
strategies on how to survive in the competitive business world over rival companies. * To be able to know competitive actions occurring between
competitors without incurring much cost and sacrificing its profit.
II. Central Problem

How would the company continuously improve their services to be able to maintain its edge against their rivalries?
How would the business immediately respond to the needs of their customers without sacrificing its profit?
III. Areas of Consideration
SWOT Analysis – Jetblue
Strengths 1. Functional Structure: Low Cost Carrier with a board and multiple departments. 2. The company's combination of low fares compared to
other airlines and superior customer services. 3. New York–based JetBlue Airways has created a new airline category based on value, service and style.
4. High

Airline 's Total Revenue Growth Essay
A.Total Revenue growth
Figure 2Lufthansa's Total Revenue Comparing with Its Major Competitors
Source: Amadeus
In 2010, Lufthansa saw a 20 percent growth in revenue. This indicates that it had recovered from the financial crisis. However, the next two years the
growth rate slowed down, mainly due to the soaring price of fuel. Sales growth in 2013 declined slightly by 0.4 percent despite Lufthansa's all business
segments made a profit. The reason is that the company launched a restructuring program so that there were lots of one–way renewal expenses
(Lufthansa Group, 2013). In the following year, Lufthansa was surrounded by intense competition and internal strikes, thus the sales staggered.
Lufthansa had the highest growth rate in 2010 but the rate keep declining over the period shown. Thus in 2016 Lufthansa lagged behind its
competitors, with a sales growth only better than Air France. The SCORE and 7 to 1 strategy implemented in 2012 and 2014 seem to improve the
company's performance but still not enough to catch its competitor's pace.
B.EBITDA margin
Figure 3Lufthansa's EBITDA Margin Comparing with Its Major Competitors
Source: Capital IQ
The four airlines' EBITDA margin fluctuates from 2010 to 2016 but overall they all have higher profitability than past years. In comparison with its
major competitors, Lufthansa have a more flattening curve. In 2016, Lufthansa's EBITDA was the third place out of the four companies. As a big
company with solid financial

Essay On Loyalty And Loyalty
Customer Satisfaction And Loyalty
Zeithaml and Bitner (2000) defined customer satisfaction as the "customers' evaluation of a product or service in terms of whether that product or
service has met their needs and expectations". Therefore, satisfaction is a consumer's post–purchase evaluation and affective response to the overall
product or service experience. In other words, what consumer perceives after a product or service consumption determines his/her satisfaction. Many
researches have concluded that satisfaction can determine the customer loyalty. Customer loyalty defined as "a deeply held commitment to re–buy or
re–use a preferred product/service consistently in the future, thereby causing repetitive same–brand or same brand–set purchasing, despite situational
influences and marketing efforts have the potential to cause switching behavior. The satisfaction/dissatisfaction occurring through a matching or
mismatching of expectations and perceived performance leads to loyalty behaviour.
Customer satisfaction was the key factor that affects mostly on service loyalty. Oliver suggested that satisfaction is a pleasant routine and in order to be
effective on loyalty, satisfaction should occur for the... Show more content on Helpwriting.net ...
According to the date of Air Asia, customer satisfaction is defined as the result of a cognitive and affective evaluation, where some comparison
standard is compared to the actually perceived performance. If the perceived performance is less than estimated, customers will be dissatisfied. On the
other hand, if the perceived performance exceeds expectations, customers will be satisfied and delightful. Otherwise, if the perceived expectations are
met with performance, customers are in an unconcerned or neural stage. In general, increased customer satisfaction leads to higher customer retention
rate, increases customer repurchase behaviour, and ultimately drive higher firm

Study on the Future of Low Cost Carrier in China
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Delta and The Future of The Airline Industry Essay
IV.The Future of the Airline Industry
The Airline Industry is in an interesting situation. Simply adding a low cost alternative is not enough in the industry. The Internet has made the power
of buyers grow with the transparency of ticket prices. This is not something that will change any time soon. Because of this profitability is
predominately reserved for low–cost yet distinctive carriers. No consumer wants to ride what they consider a "lesser" airline. Airlines need a way to
distinguish themselves from one another while also acknowledging the increased power of buyers. The future of the industry is in JetBlue's "cheap
chic" style. Airlines need to maintain a cost effective price point while also not appearing cheap. Small ... Show more content on Helpwriting.net ...
Through similar mergers in the 1980s and 1990s, Delta extended its reach into trans–continental and international markets (Rivkin 7–8). According to
its stated position today,
"Delta Air Lines serves more than 160 million customers each year. With an industry–leading global network, Delta and the Delta Connection carriers
offer service to 356 destinations in 65 countries on six continents." (Delta.com).
The result of this objective is the third largest commercial carrier in the world, having a strong presence in major hubs such as Atlanta, Dallas,
Cincinnati, and Salt Lake City (Rivkin 8).
As with all airlines, Delta's recent performance has been significantly impacted by industry shifts and external events. Terrorist attacks and escalating
costs have significantly impacted Delta's profitability in recent history (Rivkin 4). The company has also been losing valuable market share to the
low–cost carrier Southwest Airlines throughout the southeast and specifically in the lucrative Florida market (Rivkin 8). JetBlue also began
encroaching on key Delta routes, and this seems only likely to increase (Rivkin 9). Despite this, Delta has still performed better than any other legacy
carrier (Rivkin 8). Still, recent history has brought several changes to this legacy carrier, and the company has turned its attention towards new
competitive strategies.
II.Analysis of Delta's Competitive Strategy and Position
In recent

Southwest Airlines : The World 's Largest ' Low Cost ' Air...
Southwest Airlines (SWA) is the world's largest 'low–cost' air carrier that is headquartered in Dallas, Texas, and operates more than 3,400 domestic
flights on a daily basis. The company provides scheduled airline service to 42 states and Puerto Rico, carrying the most domestic passengers of an
airline based in the United States [9]. Founded in 1967, and commencing operations in 1971, Southwest Airlines has always had a unique and
breakthrough business model which has allowed the airline to maintain its loyal customer base and profitability [2]. Over the years, Southwest has
maintained one of the best customer service records, and its safety record is unmatched in the industry [9]. Overall, Southwest Airlines performance
has remained very stable and favorable over the years. In the third quarter of 2013, Southwest earned (net income) $259 million and expects these
figures to be even high for fourth quarter, as the airline is anticipating a huge influx of holiday travelers [5]. While maintaining such a high level of
profitability, Southwest was also ranked 2nd in customer satisfaction for 2013 by the ACSI (American Customer Satisfaction Index), shadowing only
rival low–cost carrier JetBlue. Now you may ask, "how does an airline remain at such a high level of profitability all while maintaining such a high
level of customer service in the post–deregulation era airline industry?" There's only one reason why Southwest has been able to make it out
consistently on (or near) the

Low Cost Carrier Characteristics
The idea to enter the world of the full cost carriers by low prices isn't a new one. Already in 1977 Laker Airways founded the "Sky Train" between
London and New York. Even if this service was never successful, more and more low cost carriers were founded during the progress of deregulation
and the development of an own low cost strategy began.
When we today have a look at the homepages of low cost carriers we cannot but state that nearly all of them are operating successful despite the
issues of September 11th in 2001, SARS in 2002 and the war in Iraq in 2003.
Southwest for example has shown a positive net income for the period of 1990 to 2002 (Appendix A) and is nr. 5 of America's most admired
companies in 2005 (Homepage). Also Ryan... Show more content on Helpwriting.net ...
Maintenance: As maintenance costs are a typical economy of scale business it is only possible for full cost carriers to run it cost–effective. Hence low
cost carriers mostly outsource their maintenance (Pompl, 2002). But the low cost carriers make strong efforts to find new maintenance concepts that
are more appropriate for their needs and even more cost efficient e.g. through cheaper labour costs. As Allan Marking, chief engineer at easyJet says:
"I'm not looking for the minimum maintenance performance, I'm looking for the best value where maintenance is an investment in the reliability and
longevity of the aeroplane" (Pilling, 2004).
Labour costs: " For most airlines wage costs and associated social security and pension payments for staff represent the largest single cost element"
(Doganis, 2002, p.115). Appendix C gives an overview of the great differences in average annual remuneration. In the low cost business it is normal
to get lower wages by higher duty times for the crews as low cost carriers aim to make the pilots most productive. "The average Southwest Pilot
produced 800 block hours in 2000. In comparison, the average United Airlines' pilot produced only 54% of the output produced by the average
Southwest pilot" (Gillen & Lall, 2004, p.44). Despite this fact the staff of Southwest is highly motivated. For instance

Swot Analysis Of Southwest Airlines
There are a variety of tactics and strategies Southwest uses in order to compete with the rest of the airline industry. One of the most significant and
most effective strategies Southwest uses is their no extra bag fees. This is part of their slogan and also differentiates it from most of the competition.
While Southwest only uses one type of aircraft, other airlines are increasing capacity and are experiencing higher revenue growth.
D. Who are the high and low performers in the industry? Why?
The current high performers include Delta, American, and Southwest perhaps because increased labor costs are behind them and they have the most
exposure to stronger domestic yields.
E. What are the competitive dynamics between and within groups?
Pricing is the main competitive dynamic between competing airlines. The industry is constantly striving for the lowest possible prices, while also
trying to fit the most passengers per flight. There is a trend in creating minimal featured tickets in order to drive prices lower. Some tactics are
providing no carry on bags as well as no inflight amenities. Airlines are competing for the key demographic which does not care about the experience
but just the destination.
IV. The Future of the Industry Ashley
A. Given your industry and intra–industry analysis, what do you think the future holds for the industry? What do you predict will be future trends in
industry performance?
Now that most airline travel is on budget carriers, we

Jetblue Essay
JetBlue
JetBlue was merged in August of 1998. It is an American low–cost carrier and is the 6th largest airline in the United States. The corporation is head
quartered in the Long Island City community of the New York City region of Queens. Its main stream is at John F. Kennedy International Airport.
JetBlue transports services across the United States, the Caribbean and Latin America.
Next, with JetBlue being a low–cost carrier, they are currently working on growth plans to help bring in more revenue. They face competition
because other airlines are corporated with large corporations and major legacy carriers. JetBlue needs a massive network. If JetBlue can't increase in
size, it could lose market share while others keep increasing. JetBlue, knew that in order to keep up with other carriers, they had to escalate the number
of commercial airline partnerships. The increase has led to more money revenue. Also, airport deliveries played a major role with problems that they
were facing. JetBlue has not been around, as long as South West Airlines, American Airlines, United, andDelta Air Lines. That means that since they
haven't been around as long, they have to commit their time to trademark their name out and keep up positive feedback. For other aircrafts, it may be
considered "older" aircrafts, but JetBlue had needed to brand out more aircrafts. If they did make too many planes and they were not used, it would
cause them to either sell, park, or lease to other airlines.

Airline Business Environment in Asia
Introduction
Singapore Airlines is one of the world 's leading carriers with an advanced fleet and it is internationally respected as the innovative market leader
combining a quality product with excellent service .Being a international company in the competitive International business environment ,it has to face
a number of competitions ,challenges ,changing environmental trends and options .To deal with these issues ,SIA pursue a number of management
strategies while maintaining it's key resources and secret of success. This report will analyse the Singapore Airline's corporate strategy ,business
environment ,key resources,key success factors and issues facing by the company.
Airline Business environment in Asia–Pacific ... Show more content on Helpwriting.net ...
The growing number of Alliances is one of the major changes in the Southeast Asia Airline industry.After the Asian currency crisis in 1997,many of
the Asian airlines became aware that they need to change their traditional conservative approach to regional and global partnership.Therefore,majority
of the Asian Airlines tried to be part of the Alliances.Most major Asian Carriers become part of some alliances. Involvement in these alliances has
prompted efficiencies in other areas ,including cost cutting ,privatisation and route rationalisation which have helped airlines to reach a satisfactory
level of economic performance in a short time. The large Airlines such as SIA ,Thai Airways become part of the Star Alliance .But SIA took
sometime to enter the Star Alliance because of it's failure to buy News Limited's 50 per cent stake in Ansett Australia .But eventually,it sign up as the
twelfth member of Star Alliance in October 1999 and SIA was the last major airline in the region to commit to an alliance.(Hill et al,2004)
Key Resources
The success of the company depend on a number of factors .Key resources are one of the important factors that play in the main part of the company's
success .Key resources include tangible resources such as plant and equipment ,intangible resources such as brand name and organisational capabilities
.Being a successful company ,SIA

Porters Five Forces Model & the Airline Industry
Porters Five Forces Model & the Airline Industry
Robert Warren
6/11/2011
Abstract Having conducted research on Porter's Five Forces Model and the current business climate of the airline industry, I will be analyzing the
industry using the Five Forces Model. Porter's Five Forces model is a highly recognized framework for the analysis of business strategy. Five forces are
derived from the model that attempts to determine the competitive intensity, competitive environment and overall attractiveness of an industry. The
framework is based on five forces that describes the attributes of an attractive industry and suggests when opportunities will be the greatest and threats
the least within an industry. The five forces include ... Show more content on Helpwriting.net ...
For example, Boeing and Airbus supply most commercial aircraft. The concentration within the suppliers segment of the industry makes it very
difficult for competitors to exercise leverage over another supplier and obtain lower prices. The power of the supplier is one key in prohibiting the
ability of competitors to earn higher profits. According to my research the power of buyers is medium to increasing within the airline industry. Over the
last few years, buyers have been presented more choices when choosing an airline carrier. The internet has created a structure of easier pricing
information and allows the buyer to more easily compare pricing. Buyers can sometimes find pricing discrepancies on the exact flight due to less
fragmented pricing information at the buyers fingertips. The internet and it's ability to compare prices has also allowed the emergence of a few
budget airlines to be profitable. Much of the bargaining power of the power can still depend on where the flier is traveling. The "hub" system,
mentioned earlier still allows the larger airlines to dominate certain cities and creates an environment of higher prices in that market. For example, a
flight from Nashville to Santo Domingo, DR presents the flier with very low bargaining power. Unless the flier wants to fly through NYC or Newark,
NJ, he/she must fly American Airlines via Miami. The price for this flight is typically very high due to no other airlines

Southwest Airlines Vs Jetblue Merger
Given the fierce competition in the airlines industry and the additional competition being offered by the new ultra–low cost carriers, it has become
imperative for Southwest Airlines to find a solution that will be sustainable and insulate them verses these and any other future threats. Southwest has
initiated a merger proposal with JetBlue that will result in the newly formed SouthwestBlue being much larger and able to compete for control of the
North American Continent as the number one provider for customers concerned with both low–cost and excellent customer service. Because both
Southwest and JetBlue have similar core values, customer service policies, and business models, it will be an easier merger than it would be for two
carriers with drastically different layouts.... Show more content on Helpwriting.net ...
The merger is expected to take a total of 5 years with an end result of a fleet of nearly one thousand planes covering more than 150 cities in United
States with connecting flights to more than 30 countries around the world. All evidence indicates that a merger betweenSouthwest Airlines and JetBlue
Airlines can be completed within 5 years and will be successful in helping the merged company become the industry leader in low–cost, high customer
service airline carriers in North America. The minor obstacles such as redundant cities, a balloon payment owed by JetBlue, redundant Point of Sales
Systems and baggage tracking systems, and a surplus of employees, is negligible and easily resolved during the 5–year merge period. A few decisions
will still need to be made such as what to do about employee contracts being different between the two carriers and pension plans but the merger is
being given a good to very good rating for its chances to succeed as

Five Advantage: A Comparison Of Low Cost And Legacy Carriers
Q1. What is the Value Chain?
Michael Porter in his book "Competitive Advantage: Creating and Sustaining superior Performance" published in 1985 introduce the Value Chain
Analysis. His theory explained how an organisation can use or maximise its competitive position or strength by linking the activities it performs. This
theory assumes that the organisation is more than a random compilation of machinery, people and money. It also proposes that if these things are
arranged into systems and systematic activates, the organisation will be able to produce a product or provide a service that customers are willing to
pay a price.
Porter theory identifies primary activities (inbound logistics, operations, outbound logistics, marketing /sales and service) which are directly concerned
(n.d.). How Should Airlines Structure? A Comparison of Low Cost and Legacy Carriers. Retrieved March 8, 2015, from http:/
/www.kellogg.northwestern.edu/faculty/chopra/htm/research/Airline_RESEARCH,7sept06.pdf
Darby, M. (2007, July 15). LIAT Responds to Questions on High Air Fares. Retrieved March 8, 2015, from http://www.liat.com/UserFiles/File
/High_Fares.pdf
High fuel cost, maintenance, manpower drive airfare cost up. (2012, December 10). Retrieved March 8, 2015, from http://curacaochronicle.com
/aviation/high–fuel–cost–maintenance–manpower–drive–airfare–cost–up/
LIAT aims to cut over 150 employees reducingcosts by EC$13 million per year | Caribbean360. (2015, February 15). Retrieved March 8, 2015, from
http://www.caribbean360.com/news/liat–aims–cut–150–employees–reducing–costs–ec13–million–per–year
LIAT to reduce fuel surcharge cost on tickets. (2015, January 10). Retrieved March 8, 2015, from http://antiguaobserver.com
/liat–to–reduce–fuel–surcharge–cost–on–tickets/
LIAT re–introduces fuel surcharge in the wake of high fuel prices. (2011, August 10). Retrieved March 8, 2015, from

The Business Model Conceived By Ceo Michael O ' Leary
Introduction
Ryanair has long been the pioneer for low–cost commercial air travel. The business model conceived by CEO Michael O'Leary affords the company
much in the ways of agility and long–term adaptability. With the economic recovery of the European Union, new threats arise to challenge Ryanair
such as an emerging budget air carrier market, fluctuating fuel prices, and controversial customer relations. Examined in this paper will be the internal
cost accounting factors that affect the firm as well as an analysis of Ryanair's Strengths, Weaknesses, Opportunities, and Environmental Threats
(SWOT). Through all of this many opportunities arise in the way of route expansion and capitalizing on existing revenue. To understand the... Show
more content on Helpwriting.net ...
Many air carriers were denied use of the air space in another country simply due to nations holding a strong opposition to commercial air competition.
In 1986, Ryanair obtained permission to service the airline's second route running from Dublin, Ireland to London–Luton and compete directly with
British Airways. This permission was given by each host nation that had begun a progressive movement towards the liberalization of air travel between
European Union (EU) nation states.
From 1987 to 1990 Ryanair opened an additional 17 Routes and begins to emulate jet travel into the route structure. However, during this period
Ryan air continued to emulate the standard business model due to continued fare regulation as well as a lack of innovation. Deregulation of air
travel with European Union members had not yet taken full effect, and thus led to continued high operating costs and losses for Ryanair. Ryanair
eliminated the frequent flyers program as well as no longer offering business class which caused a continued increase in passenger traffic but still
had the airline operating at a loss. In 1987, Michael O'Leary was hired by Tony Ryan as a tax and personal finance director. O'Leary was soon tasked
with aiding in the restructuring of Ryanair in an effort to return the airline's profitability. O'Leary is a believer of a low fare

Delta Air Lines (a): the Low-Cost Carrier Threat
Delta Air Lines (A): The Low–Cost Carrier Threat
Problem: Delta Airlines didn't have a comprehensive response to low–cost carriers across functions.
Option: Delta should launch its own low–cost carrier.
Problems: Nearly all major airlines had done this unsuccessfully, proved unsustainable over time, never had a high–cost carrier transformed into a
low–cost carrier.
Since deregulation (1978) the average return on investment below cost of capital for the 5 largest carriers. Due to 9/11 the demand for air travel
declined sharply.
Airline's profitability hinged on the fraction of its flown seats occupied by passengers– load factor
Costs measured in cost per available seat mile (CASM) – cost required to fly one seat one mile
JetBlue
Low CASM, high load factor
Humanity, good amenities (in–flight entertainment system)
Low costs: simple fare structure
New technology: Internet (60% of seats were booked on–line), paperless operation, computerized, Reservation operation (not using call center)
Strong brand: "Cheap chic" image
Employees are all nonunion, high "esprit de corps", flexible employee package,
2. Why have all of the low–cost subsidiaries of full–service airlines, including Delta Express, failed?
The main reason for the low–cost subsidiaries' failure is the airlines' corporate strategy. By launching a LCC as a unit inside the same corporate
structure (e.g., single scheduling and pricing centre for United Airlines' and Shuttle's low–cost flights), traditional airlines limited the LCC's flexibility
and independence. By building a low–cost carrier on top of a traditional carrier cost–structure, the parent company was also tempted to think low–cost
when setting ticket prices, but not trying (or being able) to reduce traditionally high costs: the airline had now two unsustainable business models
instead of one!
Secondly, such a strategy requires an extremely complex cultural change. Airlines are traditionally

The Low Cost Carrier Model
Multimedia University
BRM8014 Advanced Marketing
Case Writing
The Low Cost Carrier Model – Air Arabia
Student Name: Abdelbaset Queiri
Student ID: 1111800065
1. Introduction
Amidst the global crisis in the airline industry, figures from the International Air Transport Association (IATA) report that actual passenger traffic
worldwide has increased 5.9% from the previous year for the period Jan–Sep 2006. Alarmingly, the Middle East has shown the strongest growth with a
remarkable 15.4% for the first nine months of 2006 (Fig. 1). Within the Middle East, the GCC (Gulf Cooperation Council) region in particular has seen
major developments. New entrants are threatening the existence of long ... Show more content on Helpwriting.net ...
Qatar Airways and Emirates Airline have a clear vision of extending their network to cover the globe and have placed large orders from both Boeing
and Airbus. The most popular plane ordered by the region is Airbus's A330 representing 13% of total orders placed from 1980 to 2005. This is closely
followed by Boeing's 737 with 11% of the total. (zawya.com 2006) Besides the conventional H&S carriers, low–cost carriers (LCC) were recently
introduced in the region. In 2003, Air Arabia was established in the U.A.E. introducing the first LCC in the region. LCCs are airline companies
typically of one service class dedicated to providing the best service at the lowest price possible. Also known as the no–frills airlines, these carriers
mainly serve short–haul routes and have high aircraft utilization rates. Currently there are two additional airlines within this class, Al Jazeera from
Kuwait and the newly established Sama Airlines from Saudi Arabia. However, more of such airlines are expected to appear as regional traffic increases.
3. Industry Analysis
Porter's 5 Forces Model
To understand and analyze an industry's structure Michael Porter developed a model portraying every industry to be influenced by five different

forces (Jobber 2004). According to Porter, these five forces are the threat of entry, the power of buyers, the power of suppliers, the threat of substitutes,
and the competitive rivalry.
I. The Threat of Entry
The airline

Analysis of Bulgaria Air and the Eastern-European Airline...
International Strategic Management
1.Legislation and regulatory rules in the industry
Bilateral air service agreements remain the primary vehicles for liberalizing international air transport services. In the past 15 years more than 157
"open skies" agreements have been concluded between 96 states, the US being one of the states in 82 of the cases.
Along with the continuing liberalization of air transport regulation, the protection and improvement of airline passenger rights has gained greater
importance, particularly but not exclusively in major markets. A significant number of States, in recent years, have adopted regulatory measures that
address some of the issues such as denied boarding ... Show more content on Helpwriting.net ...
Hand baggage (including personal items)
The carrier is liable if it was responsible for the damage.
Make sure to file your claim within 7 days of receiving your luggage (or 21 days if your luggage was delayed).
If you wish to pursue other legal action, you must do so within 2 years of the date your luggage arrives.
If you are travelling with expensive items, you might be able – for a fee – to obtain a compensation limit higher than в‚¬1,223 by making a special
advance declaration to the airline – at the latest when you check in. Though, the best thing is really to take out private travel insurance.
14 Nov 2013 – Eu approved usage of consumer electronics during take–off, landing and above 3000. The European Aviation Safety Agency (Easa) has
approved the use of electronic devices during take–off and landing and will publish its guidance regarding safety testing and which devices can and
can 't be used during all phases of flight by the end of November 2013.
The approval follows Federal Aviation Administration's ruling in October that personal electronic devices such as e
–book readers, tablet computers and
portable games consoles could be used "during all phases of flight". Mobile phones will also be allowed, as long as their cellular radios are disabled or
they are put into "airplane mode".
Larger electronic devices, such as laptop computers, will need to be stowed during taxiing, take–off and landing due

Air Canada
Air Canada – Risk Management
Case Report
Industry Overview The airline industry is one of the largest global industries in the world. Airline companies in the airline industry have gone through
challenging obstacles in the past decade. Many changes have occurred within the industry and increased regulations have driven up cost for the
industry. The attacks on 9/11 left the industry in shock when planes were used in terrorist attacks in the United States. These attacks changed the
mentality of the industry and shifted the focus towards safety. Safety was also a major concern in the industry with the breakout of SARS in 2003 and
the H1N1 flu in 2009. The airlines had to ensure that public health and safety of the travelers were ... Show more content on Helpwriting.net ...
According to the Bureau of Transportation Statistics, the airline industry experienced losses from 2001 to 2004. In 2005, the industry was profitable
for the first time in four years and stayed profitable through 2007. The economic and financial crisis in 2008 took a toll on the industry, causing a few
airlines to file bankruptcy. The improvement of the economy in 2009 and 2010 helped the industry get back to profitability. Airlines were using
tactics to increase revenues, including charging baggage fees, charging for food and drinks on board, and some airlines charged additional fees for
seats with more leg–room. The large increases in revenues helped to offset the higher fuel costs, helping the companies achieve profitability.
Air CanadaAir Canada is Canada 's largest full–service airline and the largest provider of scheduled passenger services in the Canadian market, the
Canada–U.S. trans–border market and in the international market to and from Canada. In 2010, Air Canada improved its reputation as one of the
world's leading international air carriers. Significant progress was made on executing and delivering on its four key priorities and this, coupled with
improving economic conditions, allowed Air Canada to record operating income of $407 million in 2010, a $677 million improvement from 2009. Air
Canada's financial strategy is to continue to improve both the level and sustainability of its

Competitive Strategy for Low Cost Airlines
Proceedings of the 13th Asia Pacific Management Conference, Melbourne, Australia, 2007, 431–436
Competitive Strategy for Low Cost Airlines
Hongwei Jiang
RMIT University, Australia
Abstract The aim of this paper is to identify challenge faced to Low–Cost Carriers (LCCs) or Low–Cost Airlines and provide new insights into the
development and competitive strategy for LCCs. LCCs are still a relatively new phenomenon in Australia since Virgin Blue and Jetstar came to the
market. There are over 30 LCCs have been launched since 2002 worldwide. In fact, LCCs have been very successful in the USA and Europe since
1990s. For example, in 1994 less than 3 million passengers flew on LCCs. In 1999, five years later, this figure had risen to about 17.5 ... Show more
Today,Southwest Airlines operates more than 3,100 daily flights to 62 cities across the United States, and registers yearly more than 80 million
passengers. What began as a small Texasairline, Southwest now has grown to become one of the largest airlines in the United States1. European history
of low–cost airlines is much younger, but those airlines are for sure trendsetters of the 1990s. The expansion of LCCs in Europe coincided with the
final deregulation of the market during the 1990s. Genuine lowcost operations began in Great Britain in the 1990s with the Irish company Ryanair
(founded in 1985 and started operating flights in 1986), which was patterned on American Southwest Airlines. Following Great Britain, LCCs have
successfully developed on the Continent (Grotte, 2005). In the year 2005, there are 60 low–cost airlines operating in Europe2. Prior to 2002, there
were no significant low cost scheduled carriers operating in the Asia Pacific rim. The initial slow development was in part due to the perception that
the low cost model adopted in the United States and Europe could not be replicated in Asia, because of the longer aircraft stage lengths, lack of
secondary airports and regulatory restrictions preventing access to international markets. The latter being particularly relevant given

Increasing Competition Between Low Cost Carriers
Introduction
With the advancement of technology, traveling around the world is no longer a privilege to wealthy people. Tony Fernandes, the owner of AirAisa,
pointed out that the raising middle class in Asian countries starts to be able to afford air travel for the first time (Grant, 2013). To the people who often
have budget constraint while traveling such as students and social freshmen, it is more likely for them to go for short–haul or medium–haul trip rather
than the countries with longer flight length and higher prices. The low–cost carriers (LCC) capacity share boosts significantly in Southeast Asian
countries such as Indonesia, Thailand, Malaysia, Singapore and the Philippines from 3% in 2001 to over 50% in 2012 (CAPA, 2013).... Show more
But in order to decrease the ticket prices, Scoot charges for the "extra" services. For example, passengers can only bring a hand carry baggage with a
10 kilograms minimum and have to pay an additional fee when they have checked–in baggage. Therefore, due to the cost control, the augmented
product such as friendly crew and in–flight entertainment are not necessary. However, although Scoot is a LCC company, there is still a premium
cabin called ScootBiz, which provides better services with the traditional airlines' quality.
Price is one of Scoot's biggest competitive strengths; it claimed to offer tickets up to 40 percent cheaper than traditional airlines (CNN, 2011). Since the
price sensitivity for LCC customers is much more higher then the traditional ones, customers, especially students, often do a lot of researches online
comparing the prices between different airlines (Grigolon, Kemperman and Timmermans, 2012). Scoot cut down the operating cost by cooperating
with Apple, using iPads to replace the traditional entertainment system, which weighs more than two tons, to save fuel (Bloomberg, 2012). As
mentioned in the last paragraph, they removed the unnecessary extra service such as the entertainment; making iPads rentable only for the ones who
needed is an effective way to cost down. While fuel prices keep increasing these years, this

The Air Transportation Stabilization Board
The terrorist attacks on September 11, 2001 shook the United States in a profound way, deeply upsetting the national perception of safety within U.S.
borders. No industry or sector of the economy felt the impacts of these events more than the airline industry. Both the immediate reaction to the attacks
and the long–term repercussions have negatively affected the industry. Today's airline industry is much different than it was prior to September 11.
There is a much smaller work force, more low–cost carriers, more security and more fees associated with flying. Directly after the terrorist attacks, the
government closed airports, canceling thousands of flights at a direct cost to airlines. Passenger travel fell drastically due to our air space being closed
temporarily, but the main reason was the loss of consumer confidence. Airlines experienced roughly a 30% reduction in consumer demand immediately
following the attacks. The Air Transportation Stabilization Board was created in the weeks following the attacks. The board was authorized to give
faltering airlines up to $10 billion in government backed loans. Despite this government funded measure, several prominent airlines declared
bankruptcy. At the same time that the industry was facing this large–scale drop in the number of passengers, low–cost carriers grew significantly and
air fares decreased. As a result of the massive financial losses due to lack of passenger demand, canceled flights and increased expenditures for

Low-Cost Carriers vs Full-Service Airlines
Research was conducted to understand passengers' views and attitudes towards Low–Cost Carriers and Full–Service airlines. The research was focused
on a group of passengers with one crowd using a Low–Cost Carrier and the other using a Full–service airline. The airlines that will be used in the
research are Aer Lingus and Ryanair running in a fully developed European market, and Malaysia Airlines and Air Asia currently functioning on a
recent developing domestic market in Asia. After conducting the survey, results show that the younger people are more likely to use Low–Cost service
carriers with Ryanair accounting for 24% and Air Asia with 47% who all belong in the age group of under 25 years. 87% of the age group were
travelling to visit... Show more content on Helpwriting.net ...
During 2002, Ryanair would charge its one–way fares at about 50 Euros. The Pricing approach adopted by Ryanair more commonly termed the
'Ryanair effect' had become a popular marketing strategy worldwide. Part of the Ryanair's strategy for increasing market demand is the
distributing of free tickets. In the first few months of 2003, Ryanair had distributed 100,000 free seats as a way to celebrate its opening of its new
outlet at Bergamo. As a result, Ryanair received 90million passengers in 2004 and consequently offered 900,000 seats at 90 pence. Researchers have
accumulated that within 5 years time, Ryanair would plan on giving away 50% of its flight tickets for free. Accordingly passengers' perception of
LCCs will thus expect lower fares from Low–Cost Carriers, especially from Ryanair. Research was drawn to asses the cross–price elasticity of demand
between Low–Cost Carriers and full–Service Carriers. The aim was to figure out the behavioural patterns of passengers if they are willing to switch
from Low–Cost Carriers to traditional airlines if fare levels reduced significantly. Results show that If Full–Service airlines reduced their fares by 30%,
then 45% of Ryanair's passengers and 39% of Air Asia's passengers would be willing to switch airlines. Even if Low–Cost Carriers in Asia was just
relatively a new phenomenon, they have already adopted strong low fare

Airline Industry Analysis 3
[pic]
The World Airline Industry
A European Perspective
(Case Study)
MCS–M–160
International Strategy
Student Name: Siyuan Li
Student ID: 2800712
Unit Coordinator: Robin John
Question 1
Through PESTEL analysis, identify the major external environmental drives influencing the airline industry. Since the end of the case (2003), to what
extent have these driving force changed?
Question 4
Analysis the business model of the low cost airline, discuss their competitive strategies, and their future prospect in the Europe airline industry?
Contents
Introduction..................................................4
PESTEL Analysis...........................................5
Future Development on

Airline Industry ............................................8 ... Show more content on Helpwriting.net ...
People were afraid of flying, which led to a decline in passenger traffic.
Terrorists
The world airline industry was severely shaken by the terrorist events of 11th September 2001, and this is directly result in a catastrophic fall in
personal air travel. After that, the security level was increased at all the airport, that result in high cost put into airline industry, due to more personnel
and further expensive security applications. More security leads to increase waiting times, makes air transportation less attractive.
Economical
Economical can be another major factor for the airline industry. Airlines ' profitability is closely tied to world economic growth and international
trade. Due to the rate of war and terrorist event, the growth rate of economy dramatic slowdown, capacity in Europe outstrips demand, which gains the
low yield to the airline industry. The airline industry is now faced with significant capacity overhang and high cost platform, especially in the US. The
report shows that, two major airlines American Airline and United airline losses of more than US$ 3billion for 2002, which makes world airlines get
struggle.
Moreover, oil prices increasing also affecting their profits. The price of fuel increasing which lead to the more money will put into ticket. Therefore
the passenger demand will decrease. In recent, especially for the

Jetblue: Strategic Alternative And Recommend Strategy
VI. Strategic Alternatives and Recommend Strategy
A. Strategic Alternatives: Internal Factors:
External Factors: Strengths:
1. Decentralized organizational structure and workers are not unionized
2. Automation of specific work to rise in productivity
3.Customer satisfaction.
4. Marketing through divers kinds of media form
5. R&D: new offering of premium class
6. Greater aircraft use– newest fleets.
7. HR focuses to accomplish customer expectations and organizations objectives through culture oriented service. Weaknesses:
1.Maintenance of older aircrafts.
2. Debts paid because of decline in interest rates.
3. Decline in yield per passenger mile.
4. Rise in carrier's tax.
5. Lower demand amid off–peak season.
Opportunities:
1. Concentrating on latest ... Show more content on Helpwriting.net ...
Recommended Strategies:
The best strategies that can be enforced by JetBlue are the SO strategies, WO strategies & ST strategies. The strategies might differ based on the
business unit needs. Marketing teams should concentrate on offering holiday bundle or other relevant services & products amid the low demand period
or may also market its latest services & products in order to maintain new and old customers. Operations should concentrate on enhancing yields &
scheduling more flights during the day with a minimal turn around time per aircraft. Finance must concentrate on buying of latest aircrafts.
The ST strategies & WO strategies will be regarded as a short term strategies, as selling older aircrafts will support in financially balancing out the
organization, or likewise utilized in investing on latest aircrafts or other services & products. Automation of some workforce will bring awesome deal
raised productivity in the complete operations, thus saving few operational costs which later can be utilized for operational cost. However Automation
can't be intensely relied on upon and because of few system problems; physical man forces will be

JetBlue Airlines Case Analysis
JetBlue Airlines
Strategic Management Case Analysis
Introduction to the Company
History of the Firm JetBlue was established in 1999, and was the third airline start–up for founder and CEO David Neeleman. Neeleman managed to
gather $130 million, the most ever raised for a start–up airline, from investors that included Chase Capital and financier George Soros. With the large
start–up capital he purchased new Airbus A320 jets equipped with satellite TV, a first in the industry. In 2004 the company ordered an additional 30
new A320 aircrafts from Airbus. The airlines first flight was from New York to Fort Lauderdale in 2000. During the year, the airline added nine more
destinations in California, Florida, New York, Utah, and... Show more content on Helpwriting.net ...
Regional airlines such as SkyWest and Mesa generally operate smaller aircraft on lower volume routes. These airlines generally form alliances with
the major carriers and provide service from their hubs to smaller cities in the region. Low cost carriers such as Southwest developed after deregulation
in 1978. Southwest pioneered the low cost airline model, which many other airlines have tried to copy. Although there are currently four low cost
major U.S. carriers (JetBlue Airways 2006 Annual Report, n.d.), major competitors according to market share include (Figures 1 and 2; JetBlue
Airways Corporation Overview, n.d.):
AMR Corporation
Southwest Airlines, and
UAL Corporation.
Industry Profitability
Intensity of Rivalry The airline industry can be considered an imperfect oligopoly. There are several large carriers that dominate long distance
flights, and many small carriers that compete for short distance flights. Competition is fierce, and the return for most carriers is very low. Some
airlines are trying to differentiate themselves, like JetBlue for example, by offering superior services at low prices. Other low cost airlines, like
Southwest, offer low costs with no frills. Most airlines offer a frequent flyer programs in order to develop brand loyalty. In recent years there has also
been several alliances formed between airlines. These alliances enable

Five Forces Analysis Of The Airline Industry In Europe
Introduction
This is an analysis of the Airline Industry in Europe. The paper will cover the current market situation, including financials and market volume.
Following this will be a Five Forces analysis on the factors that affect industry competition. The paper will conclude with key insights into the
profitability of the industry and a SWOT analysis of one of the industry's best performers and what rivals and possible future entrants can learn from
their success.
Current Situation
In recent years the Airline Industry in Europe has experienced good levels of growth. Despite instances of deceleration the market is forecasted to
remain stable producing moderate growth through to the end of the forecast period in 2018. According to a report issued by MarketLine in 2014 the
European Airlines industry had total revenues of $180,945.8m in 2013, which represented a compound annual growth rate ... Show more content on
Helpwriting.net ...
The sector employs more than 3 million people. Prior to the 1990's, the air transport industry in Europe had been traditionally highly regulated and
dominated by national carriers and state owned airports. Since then a single market for aviation has been created. The single market has seen the
removal of all commercial restrictions for airlines flying within Europe. These include restrictions on routes, number of flights and the setting of prices.
Five Forces Analysis of Industry
This section will examine each of the five competitive forces that are active in the European Airline Industry. In this instance the buyers in the industry
will be taken as passengers. Fuel companies, aircraft manufacturers and employees are the suppliers. Substitutes stem from modes of transport that fall
under land and sea transit. Potential entrants are any airlines based outside of Europe or newly founded airlines based in Europe.
The Five Forces:
Degree of rivalry
Buyer bargaining

Frontier Airlines
FRONTIER AIRLINES Frontier Airlines is currently an ultra–low cost carrier headquartered in the United States. It has not always been that way, but
we will discuss more about that a little later. As the reader, you may be wondering, "What is an ultra–low cost carrier and how is it different than any
other carrier?" so I'll begin by answering that question. After that I will then proceed with more in–depth information about Frontier Airline's history,
operations, finances, labor, and fleet. In contrast to legacy carriers like United Airlines, Delta Airlines, or American Airlines, which traditionally
provided full service to their consumers, the low–cost carrier (LLC) is considered a budget airline. Full service airlines included advanced ... Show more
This was partly due to the fact that they had recently purchased Central Airlines of Texas (Lankins, n.d.). It didn't take long for problems to arise,
though. Almost 15 years later, in 1980, pressure from other airlines caused management of Frontier airlines to request that their own employees forfeit
or reduce items of value, like pay, benefit in order for the airline to stay competitive (Lankins, n.d.). These cuts are called concessions. These
concessions spelled the beginning of the end, because they were not enough to help the airline recover and in 1985 they were sold to a low–cost
carrier named People Express. The doors closed and Frontier Airlines ceased to exist (Fortney, n.d.). The following year, in 1986 Continental airlines
purchased the newly merged People Express (Lankins, n.d.). Let's fast forward to 1993, as Continental Airlines scaled back its Denver hub
operations. (Fortney, n.d.) Former executives of the first Frontier Airlines saw this as a high potential moment for strategic advantage and began to
develop a business plan. By July 1994, like a phoenix rising from the ashes, Frontier Airline was restored. They began operations with two planes
previously used by Continental. By 2001, the airline was being featured in Fortune magazine's list of fastest–growing companies. (Fortney,

Benefits Of A Large Global Market Consists Of Malaysia...
Malaysia Airlines is a world–renowned flag carrier that commenced operation in 1972. The airline serves as a symbol of national pride after the
formation of Malaysia in 1963, and continues to operate to this day. Following the tumultuous events in recent times, the government carrier has
tragically suffered two fatal blows to their brand reputation. Arbitrary missing flights as well as missile shootings forced the company to rethink its
strategies.
Strengths – Appealing to a large global market consists of Malaysia Airlines' many strengths. Operating to and from numerous routes via its home base
in Kuala Lumpur, its multi–cabin fleet of 144 aircraft has boarded roughly 140,000 passengers in 2014 alone; and as such aspires to be a world ... Show
more content on Helpwriting.net ...
Prior to the mishaps, the contrasting blue–red coloured moon kite, represented "grace in motion but also thrust and dynamism" and is still
internationally recognised today. Relative to its branding image, Cabin crew that work for Malaysia Airlines are required to display a hospitable and
courteous representation of Malay culture, and show this through their daily duties on and off schedule. "Learning how to walk elegantly is just a small
component of a training regime that takes in areas such as flight safety procedures, emergency response, food service, grooming and even social
etiquette." (Platt, 2009) Training durations continue for several months to ensure the comfort, pleasure, and most importantly the safety of all
passengers. Malaysia Airlines' importance in the Asian Market also plays a role in the airlines strengths.
The airline has a greater regional seat capacity than competing airlines such as Thai airways, Vietnam and Garuda. In fact, of the 15 of the 16
destinations added to the One world network by Malaysia Airlines, are in the Malaysia region.
Weaknesses – As of the 8th of March 2014, none other than the ill–reputed MH370 aircraft had lost contact with air traffic control in the radius of
Vietnam and Malaysia. Seldom has there been such an event as large scale as this. A total of 239 passengers and crew has "vanished" off the coast of
Thailand. As a

The Success Of Delta Team
Constant innovation is the key to Delta's success. Delta realizes they compete in an industry where profit margins are small and the end product is
essentially the same. Because of this, they believe that constant innovation and improvements to operations is the key for success. Delta has built a
business around characteristic that other airlines don't offer and have capitalized on the areas where other airlines need improvements. As they move
forward, they will continue to bring innovative thinking to their operations as this model has proven successful in all areas of their business. Every day
the Delta team works with determination to apply innovative thinking throughout their organization (Anderson, 2015). Innovative thinking leads to
strong financial performance and has put Delta on a track to outperform their competition. Delta's long term financial goals are as follows: Operating
Margin – 11–14% EPS Growth – Annual EPS growth of 10%–15% after 2014 ROIC – 15–18% return on invested capital Cash Flow – $6 billion
annual operating cash flow and $3 billion free cash flow Balance Sheet – $5 billion adjusted net debt by 2016 and pension at 80% funded status by
2020 (Delta Airlines) Capabilities Strengths Delta's unique ability to innovate leads to great profits. High labor costs and record–breaking jet fuel
prices were factors in Delta's bankruptcy filing, which, at the time, had $20.5 billion in debt, $10 billion of that accumulated since January

Southwest Airlines And The World Largest Low Cost Carrier
Southwest Airlines is one of the United States major airlines and the world largest low–cost carrier. According to the U.S. Department of
Transportation, Southwest Airlines is the United States' largest carrier in terms of originating domestic passengers boarded.
Financial Ratio Analysis The decreasing of current ratio from 0.785:1 to 0.744:1 from 2013 to 2014 suggests that Southwest Airlines' short term debt
paying ability also decreases. This is not a good sign because it implies that either decreasing in current assets or increasing in current liabilities, and it
was both in Southwest's case. Moreover, since the ratios are both less than one, it suggests that Southwest Airlines has more current liabilities than
current assets. The ... Show more content on Helpwriting.net ...
Both asset turnover and return on assets denote positive use and increase of assets. The surge from 93.39% to 141% of return on common
stockholders' equity signifies the positive profit of investors. A similar jump also happens to the earnings per share ratio as the net income increases.
Because of Southwest Airlines' good performance during the year, its market price skyrocketed and caused an increase in the price–earnings ratio.
Since the differences of EPS, P–E, and return on common stockholders' equity are fairly high, the company is generating profit, and they will be
attracting new investors. The rise in payout ratio resulted from higher dividends on common stock is appealing to investors. The solvency ratios
indicate Southwest Airlines' ability to survive over a long period of time and present Southwest Airlines in a more promising manner through the
improvement of the company's ability to interests as they are due can be seen through the growth of times interest earned from 10.2 times to 14.97
times between 2013 and 2014 respectively. However, the percentage of total assets provided by creditors also raises as the debt to asset ratio progresses
from 62.07% to 66.46%, and it is not necessarily a good achievement since, after all, they are liabilities.
Recent Company News Southwest Airlines has been in the spotlight for a few events in the past month or so. Recently, the company has announced
ten domestic new non–stop routes for 2016.

Southwest Airlines' & Fuel Hedging
A "Hedge" of the Pack:
A Review of Southwest Airlines Innovative Fuel Strategy
While many airlines suffer from rising fuel costs, Southwest Airlines continues to emerge victorious in the aeronautical landscape. Other carriers now
forced to increase prices to compensate for fuel costs, are now subject to the new mindsets of consumers who are opting for longer bus and car rides,
or simply not traveling at all. The woes of the airlines industry have many posing the question if airline travel is fast becoming a travel method for the
affluent (Stoller, 2008). In the midst of the situation, Southwest Airlines is able to capitalize on rising costs and maintain its low–price position because
of an innovative fuel acquisition strategy known ... Show more content on Helpwriting.net ...
airline industry has never matched the profitability of even the average U.S. corporation (ATA Report, 2007). In its ""FAA Aerospace Forecast Fiscal
Years 2008–2025," the Federal Aviation Administration (FAA) reported on the industry's 36 mainline air carriers that use large passenger jets (over
90 seats) and 84 regional carriers that use smaller piston, turboprop, and regional jet aircraft (up to 90 seats) to provide connecting passengers to the
larger carriers (FAA, FAA Aerospace Forecast Fiscal Years 2008
–2025, A Review of 2007), stating that "three distinct trends have occurred over the
past several years that have helped shape today's U.S. commercial air carrier industry: (1) major restructuring and shrinking by the mainline network
carriers; (2) rapid growth by low–cost carriers, particularly in nontraditional long–distance transcontinental markets; and (3) exceptional growth among
regional carriers."
Within the last decade, the industry has fallen on difficult times due to the effects of the September 11, 2001 terrorist attacks, and the extenuating
weather circumstances in August 2005, which resulted in the back–to–back onslaught of Hurricanes Katrina and Rita. The effects of these hurricanes in
addition to implausible losses of life and property, would soon include reduced fuel production in the gulf, and begin a period of rising fuel costs
which affected both consumers and carriers, and now in 2008, as an OPEC

Southwest Airlines : The World's Leading Low Cost Carrier
Southwest Airlines Case Study Southwest Airlines is the world's leading low–cost carrier. This company is about providing the best, simple, and most
efficient customer experience at the lowest fares in the industry. Southwest's used their great customer service, their low pricing, and their unbeatable
staff to create a new type of airline. Many different companies noticed that Southwest was taking off. They used a couple different strategies to
accomplish this. One of the strategies Southwest used was utilizing less congested airports. This allowed them to reduce delays and increase efficiency
as well as convenience for customers. Another strategy was using only one type of plane to reduce maintenance costs and increase standardization. The
third strategy was to use a point–to–point system. This helped reduce turn–around time and customers enjoyed not having to connect flights. Fourth,
they were adamant about creating an unforgettable experience for the consumer. They hired a staff with great personality and attitude. Finally, they
hedged against fuel costs in order to keep cash flows and profitability stable as prices fluctuated. The airline industry is becoming extremely saturated
and competitive. Fares are getting lower and new airlines are forming in order to combat the increase in operating costs. In order for Southwest to keep
with its competitors, the company must stop relying on just their low prices and customer service. They must differentiate themselves for

Porter's Five Forces Analysis For Aviation And Airline...
Porter's Five Forces analysis for Aviation / Airline Industry
The service provided by airline industry is one of a kind, providing distinguished service to its customers. It is a mode of transportation and provides
efficient services, with luxury and speed which can't be replaced by any other industry. We need Porter's Five Forces analysis to understand this
industry as the airline industry is plagued by problems such as varying number of customers, increasing fuel prices, and huge costs clubbed with the
ever increasing competition from low cost carriers which provide services for peanuts. Airline industry has a vast expanse of coverage as far as its
global reach goes. Porter's Five Force analysis would also help us delve into reasons for the ... Show more content on Helpwriting.net ...
Jet Airways
It had huge debts and small planes of 70–80 seats of multiple categories and thus it increased its capacity slowly. (Source of information on categories
of fleets and aircrafts: www.jetairways.com)
2.Spice Jet
It is concentrated mainly in Tier–II and Tier–III cities. This positioning reduces direct competition with bigger players and increases cost efficiency.
This is a also good strategy because these cities are growing at a faster and a higher rate than metros
3.Air India
It managed to gain passengers at a tough time when Kingfisher couldn't perform its services as a full carrier service airline whose traffic migrated to
Air India which is country's oldest airline which a trusted brand name. This gave profits to the sinking airline

Porter's Five Forces Analysis Of Ryanair
"A company can outperform rivals only if it can establish a difference that it can preserve."(Michael E. Porter).
Founded in 1985, Irish Company Ryanair was first created as an alternative towards Aer Lingus who was operating as a monopolistic company on the
market. Operating as a full–service carrier with two classes of seating, company achieved big passenger volumes but despite its growth by the
beginning of 1990 Ryanair was one step away from bankruptcy. Immediate changes in business leading strategy were essential, so company has gone
through total operations management transformation. Ryanair extended its services towards rest of the EU, becoming Europe's first low–fares, no frills
airline and the leading airline in the world in terms ... Show more content on Helpwriting.net ...
Ryanair could take the advantage of the internet to enhance revenue through ancillary services. On the other hand, Ryanair's biggest threat is economic
recovery and fuel prices.
1.1.2.Porter's Five Forces
As expressed by Johnson an industry is a group of firms producing products and services that are essentially the same (Johnson et al, 2011). In addition
Porter's five forces framework helps understand the attractiveness of industries in terms of five competitive forces: the threat of entry, the threat of
substitution, the power of buyers, the power of suppliers and the rivalry between competitors.
Threat of new entrants relates to the extent of ease associated with entering into an industry and competing with current market players (Volberda et al,
2011). In the Low Cost Carriers (LCCs) the threat of new entrants is low due to the substantial entry obstacles linked with entering the airline industry
that include massive capital investment, economies of scale, access to supply and distribution channels, and legal requirements. However, a big threat
can emerge in the near future as Full Service Carriers (FSCs) have shown interest in joining the LCC

National Airline Market Analysis : The Airline...
National Airline Market Analysis
In response to this foreign competition and domestic pressures the Airline Deregulation Act of 1978 was passed. Deregulation meant the market would
be generally free from government controls and operate under free–market principles. By the early 1980s new carriers flooded the market causing an
initial drop in fare prices. In this new market Airlines such as Pan American and TWA suffer financially. Many of the large legacy airlines that operated
successfully under the guidelines of the Civil Aeronautics Board initially had trouble adjusting. Within the CAB system there was not enough incentive
to be efficient. As a result, free market competition was a shock to the airline system. During the 1980s and ... Show more content on Helpwriting.net ...
During this time the estimated total economic output has grown from 1.01 trillion to 1.53 trillion. Included in these estimates are employment effects,
airport activities, and the transport of cargo and passengers. These metrics are designed to estimate the total impact of the airline industry has on the
economy. While it is important 2 have an understanding of the industry as a whole this analysis will focus on the domestic passenger market.
The domestic passenger market is a multi–level system consisting of local, regional, and national carriers. Together this broad market has
approximately 100 airlines operating over 11 million flights per year. Most statistical sources include information from this overall market structure
with the vast majority of the carriers listed in a group as "other." This is because most of these approximately 100 carriers operate in local or regional
capacities and have very little impact on the overall market. For this reason, I will further narrow my analysis to only include those carriers in the
national market.
Currently the National Market consists of 17 companies varying in size and structure. There are four full service firms which control 67% of the
market and 13 low–cost carriers making up 20% of the market. The other 13% is comprised of the local and regional companies excluded from this
analysis. Domestically these

The Ascendance of Airasia Essay
Case: The ascendance of AirAsia
1. What is the macro and industry environment for new budget airlines in the Asia– Pacific region? What opportunities and challenges are associated
with that environment?
People in the Southeast Asian have low average incomes. The low average incomes should boost the cheap fares demands. In recent years, because of
the government decreased the entry barrier of airline industry, more and more carriers entered the airline market. The Southeast Asian has very large
populations; these carriers are attracted by the large number of potential travelers. This caused the Southeast Asian budget traveler increase very
quickly. Otherwise, the fuel prices increased very quickly, and... Show more content on Helpwriting.net ...
AirAsia's focus on Internet bookings and ticketless travel allowed it to emphasize simplicity for the customer while securing low distribution costs. The
revenue formula of AirAsia mostly followed the traditional low–fare approach.
Southwest Airlines:
Business–level strategy consists of their cost leadership and differentiation. Southwest Airlines was the leading pioneer in adopting a budget airline
model. They are cost leaders by keeping company expenses down and providing low prices to the consumers. Their efforts are focused on a limited
market segment such as cost–conscious business travelers. Southwest Airlines focus on the customer, having more of a "people strategy."
Ryanair Airlines:
Ryanair Business strategy fits the Operational Excellent Model of high reliability and dependability with fewer flight cancellations, great punctuality
and fewer lost bags than most airlines. It operates on a highly efficient basis too with high aircraft utilization, minimum staffing, and maximize their use
of the Internet to keep booking costs down. Ryanair airlines focus on their operation.
But, these airlines companies also have similar strategies. They all focus on low–fare strategy, customers and services.
4. Did Fernandes weigh the range of political, economic and operational uncertainties and risks when he took over AirAsia? What risks might he have
overlooked?
Yes, Fernandes weigh the range of political, economic and operational

Southwest Airlines : The World 's Largest Low Cost Carrier
Southwest Airlines is the world's largest low–cost carrier and has been in service 43 years. Southwest originated in Texas in 1971 and was to initially
only serve Houston, Dallas, and San Antonio. In 1989 the airline had grown tremendously by exceeding the billion–dollar revenue mark. Southwest
prides itself in differentiation by delivering exemplary customer service. The superior customer service is carried out by approximately 46,000
employees to over 100 million flyers annually. Southwest Airlines operates more than 3,600 flights daily on what is considered the largest fleet of
Boeing aircrafts. People prefer flying with Southwest because of the customer friendly touches. Southwest offers great service, affordable rates, pet
friendly ... Show more content on Helpwriting.net ...
With the application of the new scheduling, many flights were late on both arrival and departure. Southwest tainted its on–time record drastically; only
71.8 percent of its flights arrived on time. In comparison, Delta Airlines flew 82.7 percent on–time and Hawaiian Airlines 93.6 percent.
The Transportation Department considers a flight as on time if it arrives within 14 minutes of its schedule. One reason for the tardiness was due to
weather conditions. Winter storms that struck in December and January can be the blame for the lateness. Other reasons for being delayed include:
security delays, national aviation system delays, air carrier delays, and diversion. Southwest is also newly adjusting to the use of a larger model
aircraft. Southwest usually flies a 143–seat 737s, but the new 175–seat 737–800 takes longer to load considering it carries more passengers. These
factors contribute to Southwest's poor timing.
There are various stakeholders involved affected by this issue. Shareholders are interested in a return on investment. The new strategy was intended to
increase revenue, which satisfies the need for a return rate for shareholders. Because the strategy was not as effective as planned, this could have led
to a loss. Southwest has not experienced a loss in consumers, but this could have resulted in a decrease in revenue. Competitors are also a stakeholder
that plays a part in Southwest's issue.

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Financial Issues Faced By Delta Airlines