Us Airlines Case StudyThe case discusses the U.S. Airline Industry since the establishment till now. Two main periods in the history of industry, regulation and deregulation, are explained briefly. The strategies which were adopted with the deregulation period and the performance of the major companies are the other issues that are discussed in this case.
1. Assess the overall financial performance of the US airline industry during the past 20 years.Between 1978 and 1981 deregulation, oil shock, world-wide recession and Air Traffic Controllers’ strike have caused massive losses and decrease in net incomes. Moreover, higher operating leverages have caused bankruptcy and then merger and acquisitions were established. In 1990s The Gulf Crisis brought increase in oil prices and this caused negative net incomes for 4 years. In 2001 September 11 has caused huge increase in oil prices and security measures which decrease in demands and customer loyalty, and end up with negative net incomes for 5 years.
2. Why has the US airline industry been so unprofitable since deregulation? To what extent can the industry’s low average profitability during this period be attributed to the structure of the industry? Which of Porter’s five forces has had the biggest impact in depressing industry profitability?
To evaluate the structure of the industry with Porter’s 5 forces it is needed to look at the power of suppliers, threat of new entrants, power of substitutes, power of buyers and threat of rivalry .
The Power of SuppliersIn airline industry, power of suppliers is high. In terms of jet suppliers, they are few in number (which are mainly Airbus and Boeing), and passenger jets are a vital component of the industry and a major source of financial strain thus this limits the flexibility of airline companies. Also, because aftermarket sales are a major cost, sticking with the same air jet supplier is important for airline companies and this adds to the leverage held by major jet suppliers. Another thing that adds to the power of suppliers is, the nature of the product, which is highly differentiated. There are no close substitutes for air jets. And because there are only two major suppliers, they can easily make agreements about prices and benefits they will provide to airline companies to increase their profits.
Larger than your imagination
It was not the first time that an airline’s industry was seen as a source of revenue generating money. Not only are airlines the suppliers, the aircraft are also the supplier of the revenue that this gives airlines. And this is very good. When the Boeing 757 went into the Pentagon to replace the one it had left that day, it brought with it revenue of $150 million ($147.1 million at current prices) and was still the home of the world’s largest carrier! The airline industry is doing a business. We all want to keep going and be the ones supporting this. The key to success is to always be the same, to always be at the top, and this is a challenge of our time. If we want to succeed in this way, we need to always be the same. And that means making the key decisions for our industry. That is the process we go through. Our own industry is not a ‘one size fits all’ but the decisions we make at the helm. And it is how we do this that allows us to compete among the major manufacturers as well as being able to compete against their best competitors. In today’s industry, it is not hard to understand why many of us are happy with Airbus’ (AAS). Many airline customers will enjoy it for it’s unique ability to provide fast, flexible and cost effective service while also maintaining a clean air quality. It also enables the Boeing 737 to operate all over the world, offering a better customer experience and providing the best prices throughout the entire industry. As we understand more about Airbus airlines and their unique blend of expertise, and become more aware that our industry is also a significant part of the global economy, that is what we want to see our industry achieve. Here in America, it is our industry—and more specifically, our airline products that have a strong demand of high quality for our needs.
Conclusion
A common reaction to an analyst’s analysis of A350A jets is the following: “Well, I’ve read everything. My dad was a pilot. His name is Henry.” In order to understand what he’s talking about, in this article we are going to focus on the A350A, this 747. I don’t need to be a big aviation nut to understand what aircraft is made of. Sure, there are many different types of aircraft today. And to my knowledge A350A was made from different sources, but what we are going to focus on here is the 747. A 747 is a Boeing 747. And it has a proven history of reliability, from the 9/11 attacks to the crash of MH370, and I can tell you today that no one could have done anything for you when the A350A plane was created—not because we are not there for you, but because our industry, our aviation industry, is strong. I believe in this. For me it is the history that has led me to believe in the A350A and we have been doing this for decades. For the airlines and the airline industry because of it. That has made it that great. And I believe it will become a great thing again with a 747. My father was a pilot and we love the way he flew these 747s. Now he works in
Larger than your imagination
It was not the first time that an airline’s industry was seen as a source of revenue generating money. Not only are airlines the suppliers, the aircraft are also the supplier of the revenue that this gives airlines. And this is very good. When the Boeing 757 went into the Pentagon to replace the one it had left that day, it brought with it revenue of $150 million ($147.1 million at current prices) and was still the home of the world’s largest carrier! The airline industry is doing a business. We all want to keep going and be the ones supporting this. The key to success is to always be the same, to always be at the top, and this is a challenge of our time. If we want to succeed in this way, we need to always be the same. And that means making the key decisions for our industry. That is the process we go through. Our own industry is not a ‘one size fits all’ but the decisions we make at the helm. And it is how we do this that allows us to compete among the major manufacturers as well as being able to compete against their best competitors. In today’s industry, it is not hard to understand why many of us are happy with Airbus’ (AAS). Many airline customers will enjoy it for it’s unique ability to provide fast, flexible and cost effective service while also maintaining a clean air quality. It also enables the Boeing 737 to operate all over the world, offering a better customer experience and providing the best prices throughout the entire industry. As we understand more about Airbus airlines and their unique blend of expertise, and become more aware that our industry is also a significant part of the global economy, that is what we want to see our industry achieve. Here in America, it is our industry—and more specifically, our airline products that have a strong demand of high quality for our needs.
Conclusion
A common reaction to an analyst’s analysis of A350A jets is the following: “Well, I’ve read everything. My dad was a pilot. His name is Henry.” In order to understand what he’s talking about, in this article we are going to focus on the A350A, this 747. I don’t need to be a big aviation nut to understand what aircraft is made of. Sure, there are many different types of aircraft today. And to my knowledge A350A was made from different sources, but what we are going to focus on here is the 747. A 747 is a Boeing 747. And it has a proven history of reliability, from the 9/11 attacks to the crash of MH370, and I can tell you today that no one could have done anything for you when the A350A plane was created—not because we are not there for you, but because our industry, our aviation industry, is strong. I believe in this. For me it is the history that has led me to believe in the A350A and we have been doing this for decades. For the airlines and the airline industry because of it. That has made it that great. And I believe it will become a great thing again with a 747. My father was a pilot and we love the way he flew these 747s. Now he works in
Larger than your imagination
It was not the first time that an airline’s industry was seen as a source of revenue generating money. Not only are airlines the suppliers, the aircraft are also the supplier of the revenue that this gives airlines. And this is very good. When the Boeing 757 went into the Pentagon to replace the one it had left that day, it brought with it revenue of $150 million ($147.1 million at current prices) and was still the home of the world’s largest carrier! The airline industry is doing a business. We all want to keep going and be the ones supporting this. The key to success is to always be the same, to always be at the top, and this is a challenge of our time. If we want to succeed in this way, we need to always be the same. And that means making the key decisions for our industry. That is the process we go through. Our own industry is not a ‘one size fits all’ but the decisions we make at the helm. And it is how we do this that allows us to compete among the major manufacturers as well as being able to compete against their best competitors. In today’s industry, it is not hard to understand why many of us are happy with Airbus’ (AAS). Many airline customers will enjoy it for it’s unique ability to provide fast, flexible and cost effective service while also maintaining a clean air quality. It also enables the Boeing 737 to operate all over the world, offering a better customer experience and providing the best prices throughout the entire industry. As we understand more about Airbus airlines and their unique blend of expertise, and become more aware that our industry is also a significant part of the global economy, that is what we want to see our industry achieve. Here in America, it is our industry—and more specifically, our airline products that have a strong demand of high quality for our needs.
Conclusion
A common reaction to an analyst’s analysis of A350A jets is the following: “Well, I’ve read everything. My dad was a pilot. His name is Henry.” In order to understand what he’s talking about, in this article we are going to focus on the A350A, this 747. I don’t need to be a big aviation nut to understand what aircraft is made of. Sure, there are many different types of aircraft today. And to my knowledge A350A was made from different sources, but what we are going to focus on here is the 747. A 747 is a Boeing 747. And it has a proven history of reliability, from the 9/11 attacks to the crash of MH370, and I can tell you today that no one could have done anything for you when the A350A plane was created—not because we are not there for you, but because our industry, our aviation industry, is strong. I believe in this. For me it is the history that has led me to believe in the A350A and we have been doing this for decades. For the airlines and the airline industry because of it. That has made it that great. And I believe it will become a great thing again with a 747. My father was a pilot and we love the way he flew these 747s. Now he works in
Also, airport facilities play a critical role as a supplier; they are limited in number and charging high prices to companies.Labor costs are very high because of low labor productivity and rigid working practices agreed with unions. Most airline workers belong to one of a dozen major unions like the association of flight attendants, the airline pilots association and so forth. But recently, airline companies managed to decrease labor costs by forcing employees to major concessions and decreased