Categories for Airline

Strategically evaluation the airlines based on your choice using the SWOT analysis Essay

Strategically evaluation the airlines based on your choice using the SWOT analysis Essay

SWOT are meaning of the Strengths, Weaknesses, Opportunities and Threats. First, we discuss the strengths of Cathay Pacific. Cathay Pacific established in 1946, it’s a long history experience base on Hong Kong. It is a large-scale international airline around the world, includes flights to Asia, Europe, Africa and USA. The services that this airline provides are passenger transport and cargo services to 167 destinations in 42 countries and territories around the world.

The Cathay Pacific is a strong financial position from Swire Group and its acquisition of Dragon Air is the market leader in Asia.

The Airlines is a strong relationship with Air China and China Government are increased shareholding in Air China, it is a majority shareholding in Air Hong Kong with all cargo carrier services. On the other hand, they well-trained labor force of the high quality service, it around 29,800 employees in the world and the superb team is about 22,000 in Hong Kong. Cathay Pacific is adapting in organizational structure.

At last, Cathay Pacific development of online service for its business growth, the passenger can book on the website for operating in many routes easily.

{1} It have strong Media Centre and awards, for example, Slogan “Asia’s world city Hong Kong”, World’s Best Overall Airline, Best first class lounge and most punctual airline between London and Hong Kong. After that, provide the new types A340 of aircrafts for saving energy and efficient operations. Some of the long haul flights are always 100% Full. Second, the weaknesses of the Cathay Pacific are strong labor union and potential strike and negotiations.

The environment of Long Haul Equipment, apparently the current A340 and B744 both of them have their weakness, B744 still have a little bit noisy, and A340 have a narrow cabin to affect the comfort. There are low margins and keen price competition. However, it is earning per share under fluctuation and uncertainty. Third, the Opportunities are stable economic growth and increase the needs of traveling in Asia. It development of global travel and tourism industry and air freight and logistics it is because of globalization. There is relaxation of China policy in outbound tour.

The expansion of cargo services in new markets (Zhengzhou and Hyderabad). It is planning for a new establishment of {5} Joint Venture business with Shanghai’s 2 international airports. For the people, they can tend to luxury flight experience and passages know Cathay Pacific is safety. Finally, Threats of the Cathay Pacific is high fuel cost, and it is increasing competition from low cost carriers like the HK Airline and Air Asia. It became the economic fluctuation in Europe and USA. {6} It is potential terrorist attack under unstable world political situation.

American Airlines Essay

American Airlines Essay

1. Issues 2. American Airlines’ objectives 3. The airline industry 4. Market 5. Consumer needs 6. Brand image 7. Distribution system 8. Pricing 9. Marketing related strategies 10. Assumptions and risks

1- Issues The main issue of this case is the lack of profits of the airline industry, an industry that should be more than profitable due to the large amount of customers, the necessity of using airlines’ services and the high prices charged by most of these airlines. What we are going to deal with is, why is this happening? And how is American airlines dealing with this problem?.

To be able to discuss how American airlines wants to regain profitability, we must identify and analyse different issues such as, the company’s background, the airline industry as a whole, the demand for air travel, the marketing strategies, the distribution systems, pricing policies etc.

2- American Airlines’ objectives American Airlines’ prime objective is to bring back value to air travel, through stimulating business travel, lowering prices etc. So in other words American Airlines’ main objective is to become as profitable as possible.

To understand better the company’s objectives we first have to focus on the company’s background, this way we will find out why the airline is not as profitable as it should, and what kind of a change is needed. American Airlines had been the largest airline in the United States for a long time. In 1990 and 1991 due to a recession and the Gulf War, demand for air travel dropped drastically, for this reason, fare wars started and all the airlines incurred massive losses.

3- The Airline industry and the market The airline industry is large, specially in the United States, mainly due to the ” Deregulation” of the industry. In 1938, the Civil Aeronautics Board was created to control the growth of the air transportation industry. This board had the authority to control entry, exit, prices and methods of competition. In the late 1970 this structure was found inefficient and in 1978 deregulation took place. Due to the deregulation of the industry competition intensified, prices dropped, and the number of people travelling increased. Many new companies emerged and regional airlines saw deregulation as an opportunity to expand.

Due to the rise in competition, by 1986 mergers started to take place and in 1987 64.8% of the market was controlled by the four largest airlines. The demand for air travel is determined mainly by price, studies revealed that half of the leisure travellers and on quarter of business travellers did not have a preference for a particular airline, which means that prices determined the preference. So the strategy to compete for customers consisted mainly in pricing and flight schedules. The demand for flights varies depending on the season or the business cycle therefore airlines have to develop different pricing strategies and offers depending on the season or the business cycle period. An other determinant for demand is technology, the new telecommunication possibilities have made air travelling unnecessary in some cases, which of course has affected airlines revenues.

4- Consumer needs. Consumer needs are clear, what airline consumers need is basically god prices and good flight schedules. These are the basic needs, apart from these ones we could also point out other needs such as big, comfortable seats for long flights, good service on board, good food, punctual departures, check-in facilities, movie channels, etc. All these are consumer needs, but studies have shown that demand is mainly determined by price and a flight schedules, the rest just add value to these two, therefore companies must focus on ways to lower prices and provide good flight timetables. There are two types of travellers, business travellers and leisure travellers, these two of course have different needs, for the first ones price is not so important because usually the company pays for it on the other hand punctuality and flight schedules are very important to them. For leisure travellers the most important thing is usually price, and the rest comes after that. But as I said before consumer needs can be summarised in these to price and schedules.

5- Brand image American Airlines’ brand image is good, due to its successful background and its new marketing strategies. In 1991 American Airlines was the biggest airline in the United States, and the reason for it is that this airline was pioneer in many fields gaining competitive advantage over the other airlines. When deregulation took part in 1978, American transformed in such a way that it became the industry’s market share leader. American had also pioneered several policies that affected the industry’s structure and standard practices.

In the late 1960’s, American introduced the first computerised airline reservation system, which revolutionised the marketing and distribution of the travel industry. American also introduced “the super saver” fares in 1977, which was the first programme of deep discounts for leisure travellers, and in 1981, American launched the first frequent-flier programme, which created brand loyalty towards the airline. American Airlines is constantly developing new strategies, and introducing new technologies, and this is why its brand image is so high. Some of the new innovations that American Airlines is introducing are, the any time fares for business, new plan ahead for leisure, lower first class fares, etc.

6- The distribution system The main distribution system for air travel is the travel agent, which provides not only the flight ticket, but also supplementary services such as car rentals, hotels, excursions, etc. Airlines ask the agents to make reservations and deliver tickets. There is a difference in the distribution of tickets for business travellers and leisure travellers. Leisure travellers deal always with the agent, but for business travellers sometimes the airlines make deals directly with the companies. Airlines also make special offers to large corporate buyers, like price discount for frequent flier travellers, or quantity discounts. Nowadays there are other distribution systems, such as on line booking, and airlines’ home delivery tickets.

7- Pricing After the deregulation, pricing policies changed drastically, airlines started to offer a wide variety of fares discounted below the regular price. These discount were accompanied by several restrictions such as advanced booking, no refund, no changing dates, etc. Therefore people unwilling to meet these restrictions paid a higher price. At American Airlines management was viewed as selling the right seat to the right person, this means that they search for ways to find out who is willing to pay a higher price, and how can they make him pay a higher price. By 1991, the industry’s pricing structure had become enormously complex. American’s flights involved maintaining 500,000 fares. By late 1991 93% of the tickets were sold at one kind of a discount or another. And the average discount was 63%. Due to the complex pricing structure American developed the “value pricing” plan. This plan consisted in: First for any given flight there would be only four different fares. Second, all fares would be mileage-related, and finally, the new fares were set below the levels of comparable existing fares so lower prices would be available to more business and leisure travellers.

8- Marketing related strategies Some the marketing strategies carried out by American Airlines have been: -Computerised reservation Systems: This system changed the industry’s marketing and distribution systems. This system stored information about, flights, seats availability and fares. Which made the booking and distribution a lot easier. CRS systems gave American Airlines a great competitive advantage over the other airlines, as booking fees by CRS enabled American to earn substantial amounts from its competitors.

-Hubbing: With hubbing, flights from various origins on spokes of the network are channelled through an intermediate location, where they change planes and are re-routed to their final destination. This way the airline can serve more locations with fewer planes. -Frequent Flyer programmes: These programmes provide discounts or bonuses to frequent travellers. The value of the bonuses increase as the mileage flown increase, the bonuses can take various forms such as, fare reductions, upgrades to better classes or even free tickets.

9- Assumptions and risks In my opinion all of this strategies are brilliant, the only risk I see is in hubbing, customers sometimes don’t want spend additional time changing planes, there is the risk of missing connecting planes, luggage may get lost, etc. In the rest of the strategies I don’t see any risks what so ever.

You may also be interested in the following: reservation essay

Analysis of Kingfisher. Essay

Analysis of Kingfisher. Essay

Kingfisher Airline is a private airline based in Bangalore, India. The airlines owned by Vijay Mallya of United Beverages Group. Kingfisher Airlines started its operations on May 9, 2005 with a fleet of 4 Airbus A320 aircrafts. The airline currently operates on domestic routes. The destinations covered by Kingfisher Airlines are Bangalore, Mumbai, Delhi, Goa, Chennai, Hyderabad, Ahmedabad, Cochin, Guwahati, Kolkata, Pune, Agartala, Dibrugarh, Mangalore and Jaipur.

In a short span of time Kingfisher Airline has carved a niche for itself.

The airline offers several unique services to its customers.

These include: personal valet at the airport to assist in baggage handling and boarding, accompanied with refreshments and music at the airport, audio and video on-demand, with extra-wide personalized screens in the aircraft and three-course gourmet cuisine.

Kingfisher is one of only 6 airlines in the world to have a 5 star rating from Sky tax, along with Asian Airlines, Malaysia Airlines, Qatar Airways, Singapore Airlines and Cathay Pacific Airways. In a short span of time Kingfisher Airline has carved a niche for itself. The airline offers several unique services to its customers.

These include personal valet at the airport to assist in baggage handling and boarding, exclusive lounges with private space, accompanied with refreshments and music at the airport, audio and video on-demand, with extra-wide personalized screens in the aircraft, sleeper seats with extendable footrests, and three-course gourmet cuisine.

Kingfisher Airlines is a subsidiary of the UB Group, one of the largest beverage companies in the world. The branding of the airline is linked to that of Kingfisher Beer, India’s largest brewery. The airline, which is headed by the charismatic Dr Vijay Mallya, took to the skies in May 2005, and attracted attention for its high quality product with personal in flight entertainment in every seat; custom interior designs for each aircraft; valet assistance at airports and complimentary hot food and beverages.

The airline initially operated a single class service but subsequently introduced a highly acclaimed First Class, allowing it to compete with Jet Airways for the high yield corporate market. In addition to its A320 family aircraft used on domestic routes, Kingfisher Airlines also operates ATR-72 turboprops on regional sectors.

Under current Indian regulations, which require airlines to operate 5 years domestic service before being granted international rights, Kingfisher will not be permitted to operate overseas until 2010. However, the airline has very clear international ambitions, with an order book for 45 wide body aircraft, including A330s, A340s, A350s and A380s.

In just over two years, Kingfisher Airlines has achieved a market share of 10% and has one of the most aggressive expansion plans of all Indian carriers during 2007. In Jun-07, it dramatically increased its influence in the market with the acquisition of a 26% shareholding in India’s largest LCC, Air Deccan, for approximately USD130 million, and an open offer for a further 20%.

Through schedule coordination and joint operations in ground handling, training, and maintenance, the carriers are projecting annual cost savings of over USD70 million. There will also be greater coordination between the two brands, with Air Deccan to adopt the Kingfisher image in its logo and to switch to a red, rather than a blue color scheme.

The combined Kingfisher/Deccan group has a market share of just over 30% and a product range spanning from the price-sensitive, first-time flyer, to the high yield business traveler, making I tone of the key pillars of the airline industry. The airline which started its operation on 9th May 2005, following the lease of 4 Airbus A320 aircraft. As of July 2007, Kingfisher operates only on domestic routes; however it has announced plans to start flights to the USA with Airbus A380 aircraft.

The airline is owned by the United Beverages Group under the leadership of Vijay Mallya (which also owns the popular Indian beer of the same name). The airline promises to suit the needs of air travelers and to provide reasonable air fares. Kingfisher Airlines’ main “luxury” component is its In-Flight Entertainment System, a first among Indian airlines. The airliners in-flight Mobile Phone and Internet Services will be provided by On Air starting 2008 for long haul flights.

“The Kingfisher Airlines family will consistently deliver a safe, value-based and enjoyable travel experience to all our guests.” VALUES Safety This is our overriding value. In our line of business, there is no compromise. Service We are all in the hospitality business; we must always seek to serve our guests and gain their trust, goodwill and loyalty.

Happiness We seek to build an organization with people who choose to be happy, and will Endeavour to influence our guests and co-workers to be happy too. Teamwork We will succeed or fail as a team. Each one of us must respect our colleagues regardless of their rank, and we must work together to ensure our mutual success. Accountability Each one of us will be held accountable for the successful execution of our duties, commitments and obligations, and we will strive to lead by example.

“Kingfisher Airlines will have ‘Fly the Good Times’ approach and this will reflect in the experience we will offer to passengers.” SERVICES
Kingfisher First
The domestic Kingfisher First seats have a 48 inch seat pitch and a 126 degree seat recline.

There are laptop and mobile phone chargers on every seat. Passengers can avail of the latest international newspapers and magazines. There is also a steam ironing service on board Kingfisher First cabins. Every seat is equipped with a personalized IFE system with AVOD which offers a wide range of Hollywood and Bollywood movies, English and Hindi TV programmers’, 16 live TV channels and 10 channels of Kingfisher Radio. Passengers also get BOSE noise cancellation headphones.

Domestic Kingfisher First is only available on selected Airbus A320 family aircraft. Kingfisher Class
The domestic Kingfisher Class has 32-34 inch seat pitch. Every seat is equipped with personal IFE systems with AVOD on-board the Airbus A320 family aircraft. As in Kingfisher First, passengers can access movies, English and Hindi TV programmers’, a few live TV channels powered by Dish TV, and Kingfisher Radio.

The screen is controlled by a controller-console on the seat armrest. Ear cup headphones are provided free of cost to all passengers. The default channel shows, alternating every few seconds, the aero plane’s ground speed, outside temperature, altitude, distance and time to destination, the position of the aircraft on a graphical map, and one or more advertisements. Passengers are served meals on most flights. Before take-off, passengers are served bottled lemonade.

Economy class meal on-board a Kingfisher Airlines domestic flight. Kingfisher Red
After Kingfisher Airlines acquired Air Deccan, its name was changed to Simplify Deccan and subsequently to Kingfisher Red. Kingfisher Red is Kingfisher Airline’s low-cost class on domestic routes. A special edition of Cine Blitz magazine is the only reading material provided.

Kingfisher Airlines is the first airline in India to extend its King Club frequent flyer program to its low-cost carrier as well. Passengers can earn King Miles even when they fly Kingfisher Red, which they can redeem for free tickets to travel on Kingfisher Airlines or partner airlines. INTERNATIONAL

Kingfisher First
The international Kingfisher First has full flat-bed seats with a 180 degree recline, with a seat pitch of 78 inches, and a seat width of 20-24.54 inches.[32] Passengers are given Merino wool blankets, a Salvatore Ferragamo toiletry kit, a pyjama to change into, five-course meals and alcoholic beverages. Also available are in-seat massagers, chargers and USB connectors.

Every Kingfisher First seat has a 17 inch widescreen personal television with AVOD touch screen controls and offers 357 hours of programming content spread over 36 channels, including Hollywood and Bollywood movies along with 16 channels of live TV, so passengers can watch their favorite TV programmers’ live. There is also a collection of interactive games, a jukebox with customizable playlists and Kingfisher Radio. Passengers are given BOSE noise cancellation headphones.

The service on board the Kingfisher First cabins includes a social area comprising a full-fledged bar staffed with a bartender, a break-out seating area just nearby fitted with two couches and bar stools, a full-fledged chef on board the aircraft and any-time dining. A turn-down service includes the conversion of the seat into a fully flat bed and an air-hostess making the bed when the passenger is ready to sleep.

Both Kingfisher First and Kingfisher classes feature mood lighting on the Airbus A330-200 with light schemes corresponding to the time of day and flight position. Kingfisher Class The international Kingfisher Class seats offer a seat pitch of 34 inches, a seat width of 18 inches and a seat recline of 25 degrees (6 inches). Passengers get full length modacrylic blankets, full size pillows and meals.

Each Kingfisher Class seat has a 10.6 inch widescreen personal television with AVOD touch screen controls. The IFE is similar to that of the international Kingfisher First class. It can also be controlled by a detachable remote-control console fitted in the armrest. This device can be used to control the IFE, reading-lights, play games and even has a credit-card swipe for shopping on Kingfisher’s ‘Air Boutique’. It also has a facility for sending text-messages, though the service isn’t provided by Kingfisher. CARGO

Kingfisher Xpress
Kingfisher Xpress is a new Door-to-Door cargo delivery service from Kingfisher Airlines. Kingfisher Xpress same day service will be India’s first and only same day delivery by air service. In-flight entertainment

Kingfisher’s IFE system is the Thales Top Series i3000/i4000 on-board the Airbus A320 family aircraft, and Thales Top Series i5000 on-board the Airbus A330 family aircraft provided by the France-based Thales Group.

Kingfisher was the first Indian airline to have in-flight entertainment (IFE) systems on every seat even on domestic flights. All passengers were given a “welcome kit” consisting of goodies such as a pen, facial tissue and headphones to use with the IFE system. Now, passengers of Kingfisher class are not given “welcome kits” but, as mentioned earlier, a complimentary bottle of lemonade and earphones for use with the IFE are still given.

The in flight magazines are special editions of magazines owned by Mallya’s media publishing house (VJM Media) viz. Hi! Blitz for domestic flights and Hi! Living for international flights. Initially, passengers were able to watch only recorded TV programming on the IFE system, but later an alliance was formed with Dish TV to provide live TV in-flight.[34] And in a marked departure from tradition, Kingfisher Airlines decided to have an on-screen safety demonstration using the IFE system; however the conventional safety briefing by the flight attendants still exists on many flights. King Club

The Frequent-flyer program of Kingfisher Airlines is called the King Club in which members earn King Miles every time they fly with Kingfisher or its partner airlines, hotels, car rental, finance and lifestyle businesses. There are four levels in the scheme: Red, Silver, Gold and Platinum levels. Members can redeem points for over a number of schemes. Platinum, Gold and Silver members enjoy access to the Kingfisher Lounge, priority check-in, excess baggage allowance, bonus miles, and 3 Kingfisher First upgrade vouchers for Gold membership. Platinum members get 5 upgrade vouchers. Kingfisher Lounge

Kingfisher Lounges are offered to Kingfisher First passengers, along with King Club Silver and King Club Gold members. Lounges are located in: Bangalore International Airport
Chennai International Airport Chhatrapati Shivaji International Airport (Mumbai)
Cochin International Airport (Kochi)
Indira Gandhi International Airport (Delhi)
London Heathrow Airport
Netaji Subhash Chandra Bose International Airport (Kolkata)
Rajiv Gandhi International Airport (Hyderabad)
However, note that the airline has suspended operation in London, Kochi, Kolkata and Hyderabad.

Kingfisher Airlines frequent flyer programme, King Club has won Top Honors at the 21st Annual Freddie Awards in the Japan, Pacific, Asia and Australia region. King Club has won the Freddie Awards 2008 in the following categories: Best Bonus Promotion

Best Customer Service
Best Member Communications (First Runner-up)
Best Award Redemption (First Runner-up)
Best Elite Level (Second Runner-up)
Best Website (Second Runner-up)
Program of the Year (Second Runner-up)
Kingfisher Airlines has received three global awards at the Skytrax World Airline Awards 2010 Named Best Airline In India / Central Asia; Best Cabin Crew – Central Asia. Kingfisher RED named Best Low Cost Airline in India / Central Asia. NDTV Profit Business Leadership Award for Aviation.

India’s only 5 Star airline, rated by Skytrax and 6th airline in the world. Rated India’s Second Buzziest Brand 2008 by The Brand Reporter. Ranked amongst India’s Top Service Brands of 2008 by Pitch Magazine. Voted as India’s Favorite Airline.

Rated as Asia Pacific’s Top Airline Brand.
Brand Leadership Award.

Economic Times Avaya Award 2006 for Excellence in Customer Responsiveness. India’s No. 1 Airline in customer satisfaction by Business World. Rated amongst India’s most respected companies by Business World. Rated amongst India’s 25 Innovative Companies by Plan man Media in 2006. The Best Airline” and “India’s Favorite Carrier’ in a Survey conducted by IMB for The Times of India. Best New Domestic Airline for Excellent Services and Cuisine by Pacific Area Travel Writers Association (PATWA). Service Excellence 2005-2006 for a New Airline by Skytrax.

Ranked third in the survey on India’s Most Successful Brand launch of 2005 under the Brand Derby Survey conducted by Business Standard. Busiest Brands of 2005 by agency fans and The Brand Reporter. Rated amongst the Top Ten Internet Advertisers by Yahoo.

Rated amongst the top ten in the Best Television Commercial Jingles by NDTV. Best New Airline of the Year Award for 2005 by Centre for Asia Pacific Aviation (CAPA) Award in the Asia-Pacific and Middle East region. Listed in the top 100 most trusted brand in The Brand Trust Report.

1) Open sky policy
2) FDI limits: 100% for Greenfield airports
74% for the existing airports
100% through special permission
49% for airlines
1) Contribution to the Indian economy.
2) Rising cost of fuel.
3) Investment in the sector of aviation.
4) The growth of the middle income group family affects the aviation sector.

1) Development of cities leads to better services and airports. 2) Employment opportunities.
3) Safety regulations.
4) The status symbol attached to a plane travel.
1) The growth of e-commerce and e-ticketing.
2) Satellite based navigation system.
3) Modernisation and privatisation of the airports.
4) Developing green field airports with private sector for example in Bangalore the airport corporation limited. ENVIRONMENTAL FACTORS
1) The increase in the global warming.
2) The sudden and unexpected behavior of the atmosphere and the dependency on whether. 3) Shortage of the infrastructural capacity
4) Tourism saturation.
1) FDI limits
2) Bilateral treaties
3) Airlines acquisitions and the leasing cost.

Strong brand value and reputation in the minds of customers. Quality of the service.
Route rationalization.
First airline to have a new fleet of airbuses.
Quality and continuous innovation.
Still a not in profit organization.
High ticket pricing.
Facing a tough competition from competitors.

The expanding tourism industry.
The non penetrated domestic market.
International market.
Untapped air cargo market.
Infrastructure issues.
Fuel price hike.
Tourism saturation
Economic slowdown.
Promotions and sponsorship declining.

Geographic Region
Social Classes
Income Level
Kingfisher First
company executives
Kingfisher Class
lower middle, upper middle, lower upper segment


Fleet Size
International Foray
Magazine and Newspaper ads
Exposure at non-corporate event
Participation in International Air shows
Endorsing celebrities like
Katrina Kaif and Yana Gupta

Dynamic pricing model – Multiple fare levels
Uniform rules
No hidden restrictions.
Pricing model – 8 different levels
Discounts provided from time to time
Backbone of the brand
Extensive trainings
Hospitality industry and consider their customer as guests
Interpersonal skills, aptitude, and service knowledge
Online Booking –
Online Booking –,,
Credit Cards & Debit Cards Payment
SMS / Call
Outlets in every major city and at every airport across the country PHYSICAL EVIDENCE
Personal valets
Exclusive lounge space
Hi! Blitz
Gourmet cuisine
world class cabin crew
5 trendy video- Fun TV; 10 music stations -Kingfisher Radio
Booking the ticket – online booking or tele-booking or from any of the kingfisher outlet

Change (%)
P/E Ratio

Jet Airways (I)

Spice Jet

Kingfisher Airlines

Global Vectra Helico

Jagson Airlines




12 Months
12 Months
12 Months
12 Months
12 Months
Sales Turnover
Excise Duty
Other Income
Manufacturing Expenses
Material Consumed
Personal Expenses
Selling Expenses
Administrative Expenses
Expenses Capitalised
Provisions Made
Operating Profit
Other Write-offs
Profit and Loss for the Year
Non Recurring Items
Other Non Cash Adjustments
Other Adjustments
Preference Dividend
Equity Dividend
Equity Dividend (%)
Shares in Issue (Lakhs)
EPS – Annualised (Rs)


Profit Before Tax
Net Cash Flows from Operating Activity
Net Cash Used in Investing Activity
Net Cash Used in Financing Activity
Net Inc/Dec in Cash and Cash Equivalent
Cash and Cash Equivalent – Beginning of the Year
Cash and Equivalent – End of the Year

12 Months
12 Months
12 Months
12 Months
12 Months
Share Capital
Reserves & Surplus
Net Worth
Secured Loans
Unsecured Loans
Gross Block
(-) Acc. Depreciation
Net Block
Capital Work in Progress.
Sundry Debtors
Cash And Bank
Loans And Advances
Total Current Assets
Current Liabilities
Total Current Liabilities
Misc. Expenses


Market Penetration
Can tie up with Corporate and Government Companies by Providing Unique Travel Solutions for Professional and Personal Use. Can implement programs implemented by South West Airlines to penetrate market. Product Development

Seek additional distribution channels such as more tie ups and Collaboration. Collaboration with international carriers, bilateral discussions over seats and code sharing between the carriers. Market Development

Special offerings for first time fliers.
Try to find out new customer group such as old-retired persons. Diversification
Can enter into other Transport Services like Bus Services between Major Cities and Other Services.

Current Indian scenario : Air travel
For majority of people preference-No frills – low cost airlines Kingfisher competing with both the “no frills – low cost” airlines as well as those with frills. Three unique classes of service :–

Kingfisher First (Business class)
Kingfisher Class (Premium economy)
Kingfisher Red (Low fare)
Current segmentation based on social class & income level
Social classes: which use full carrier services and those which use first class services of the railways Income level : Low cost carrier for those who travel by first class railway

Problem with positioning
Brand relates to Lifestyle

Needs to change brand perception
Currently perceived as Lifestyle slogan
Red color of crew :Reflects Royalty
Over dependence on brand image of Mr. Mallaya
Jet airways : Reflects professionalism
Advertisement reflecting Value for Money
Gain operational efficiencies through alliances as with Jet Airways Leverage
New fleet, Unmatched flight service
Innovative ideas-LIVE TV with 16 channels
Air Boutique, in Kingfisher Airlines
A joint promotion, i.e. using MakeMyTrip services and flying Kingfisher Airlines. By partnering with Kingfisher Airlines, further convenience in travel is offered at no extra cost- Added value Fleet size expansion

Reduce the labor cost
Simplify the flight operations
Offer more transparent pricing
Get smart on fuel
The process of acquiring spice jet if complete would make kingfisher the largest player in the aviation industry Different modes of pricing should be taken care of.
After doing a study of this project representing on Kingfisher Airlines, I have come to a conclusion that Kingfisher Airlines is one of the largest and most widespread airlines of the country providing its services not only in India as well as outside India also. It has alliance with many other airlines in this sector.

Kingfisher Airlines offers world class services to the customer at a nominal rate. The national carrier takes immense pride in having successfully played a pivotal role in making various facets of India popular with the people of the world and acting as the country’s cultural ambassador. The airline uses the services of one of the advanced plans been operated in the world. To sum up I would like to say that Kingfisher Airlines is serving its customer in an appreciated way and going to be in the list of best services providers in coming years.

Southwest Airlines Essay

Southwest Airlines Essay

Marketing is a vital part of any business and is an integral component of selling any product. Whether the business is a small mom and pop operation or a world leader, marketing is a part of the business. Because there are many ways to fulfill the needs of the customer, a straight-forward approach is to consider the four “Ps” of the marketing mix. This paper will examine the marketing mix and give examples of the marketing mix as it pertains to Southwest Airlines.

The four elements of the marketing mix are product, place, promotion and price. Product is the good or service sold to satisfy a customer’s needs. Place involves all of the decisions required to make the product or service available in the target market, or customers, place. Promotion is the process of informing the target market of the product. Finally, the fourth element of the marketing mix is price. Price setting includes components such as analysis of price setting by the competition as well as analysis regarding acceptance or rejection of prices by the identified market (McCarthy and Perreault, 2002, pp.

48 – 50).

The United States airline industry is very competitive. Following the attacks on September 11th, there have been several airlines that have gone out of business or have filed bankruptcy. Southwest Airlines has been able to stay in business and out of bankruptcy. “Southwest Airlines is the only major airline to be profitable for the past 20 years” (McCarthy and Perreault, 2004, p. 7). This is in part to their marketing department. Southwest Airlines is an airline with a creative marketing department.

The airline industry in the United States has seen many changes of the years. In the early days of air travel, only the wealthy could afford to fly. Flying to a destination was a luxury and not a part of everyday life. Today there is a wide variety of airlines and appeals to a wide variety of consumers. Southwest Airlines distinguishes its products and services from the competition through its marketing campaigns. The Dallas-based airline carved its niche in short-haul flights with low prices, reliable service, and a healthy sense of humor (Armstrong, G & Kotler, P., 2005, p.318). This humor is a major theme in the marketing campaign. Southwest distinguishes itself as a “fun” airline, known for humorous in-flight commentary from pilots and cabin crew members (Armstrong, G & Kotler, P., 2005, p.318).

Southwest has brought the place aspect of the marketing mix to all consumers. The place aspect of the marketing mix is where and when to deliver the product. Southwest Airlines uses various avenues for this. One area is providing an 800 number for the consumer to check pricing and availability. Another avenue used is the internet. Southwest Airlines has won several awards for their internet site. The internet site allows the consumer to visit Southwest from anywhere there is an internet connection. So, if you are at the library, office, internet café, or on a portable device such as a Blackberry, Southwest is there.

Southwest has become known as a low cost airline. Through research, Southwest found there is a need for a low cost, no frills airline. Price was important to the consumer when choosing an airline. A poll taken by surveyed, 31% ranked ticket cost as the most important factor when choosing an airline (Airliners, 2006).

For the price element of the marketing mix to work, Southwest streamlined its operations. By lowering their costs, Southwest can offer lower fares than their competition. For example, Southwest used one type of aircraft, Boeing 737s, all equipped with the same flight instruments. By doing so, Southwest saves time and money in training their employees on only one type of equipment. “Management can substitute aircraft, reschedule flight crews, or transfer mechanics quickly. The tactic also saves money through lower spare-parts inventories and better deals when acquiring new planes” (Kotler & Keller, 2006, p. 427).

The final P of the marketing mix is promotion. Southwest promotes its services is a variety of methods. Television commercials air during highly viewed hours such as sporting events or popular television shows. These commercials usually have a humorous tone as well as information on the latest special. Southwest latest marketing tool is named “Ding”. Ding is a computer program which allows the consumer to be notified of specials. Notifications of the specials occur at various times of the day and may occur multiple times per day. The icon for this is a tail of a Southwest plane and appears in the system tray (lower right hand corner of a computer screen).

When the specials arrive the icon changes to a piece of mail over the tail section of the plane and a sound occurs. The sound is the “Ding” tone heard in the Southwest television commercials and in the cabin of the airplane. The consumer can click on the icon to launch the software. The screen appears with the details of the latest special. These specials are market specific and are focused on time availability. The public relations for Southwest speak to the character of the company. Southwest sponsors various charitable events and the employees, including the CEO, volunteer for various events. The charity work Southwest does also aids in the promotion of the company. The consumer may feel the company is good because of its social responsibility.

The four elements relate to an organization’s marketing strategy. Marketing is just one element of an organizations overall business plan. By understanding the product which the organization is producing, the company will be able to determine materials needed, staffing needed to produce the product, and establish the cost to produce the product. Marketing should not take over production, accounting, and finance of an organization. Marketing should be included in these functions to aid in direction and coordination.

Understanding the cost of the product will allow the organization to price the product. The price of the product may vary. The reason for the varying in price is based on the customer perceived value of the product. A product with a higher price tag is generally perceived as a better quality product, while the inverse is also true. An organization should price a product at the point which will benefit the organization best.

Marketing is an important element for any business. By analyzing the four Ps of product, price, place, and promotion, an organization can have a successful marketing campaign. Whether the business is a small mom and pop organization or a major corporation such as Southwest Airlines, marketing can play an important role in its success. Understanding the marketing mix will put an organization on the road towards this success.


Airliners. (2006). Passenger Survey. Retreived March 9, 2006 from

Armstrong, G & Kotler, P. Marketing: An Introduction, Seventh Edition. (2005). New York: Prentice Hall.

Kotler, P & Keller, K. Marketing Management, Twelfth Edition. (2006). New York: Prentice Hall.

McCarthy, E.J. & Perreault, W.D. Basic Marketing: A Global Managerial Approach. (2002). New York: The McGraw-Hill Companies.

McCarthy, E.J. & Perreault, W.D. Marketing: Principles and Perspectives, Fourth Edition. (2004). New York: The McGraw-Hill Companies

Labor Relations Essay

Labor Relations Essay

In reviewing information pertaining to labor unions, there is a plethora of information about unions in the transportation industry. One of the most widely known unions is the teamster unions, which deals with truckers. Labor unions and issues with automotive industry are often seen in the media. The newest transportation industry in American history is the airline industry. As the newest transportation industry that is still vital to American comfort, convenience, and commercial, the airline industry is ripe for workers to organize and demand a greater piece of the profits from operations.

In this essay, an effort will be made to review this company in regards to labor relations. Company’s stance toward Labor Delta Airlines was founded by C. E. Woolman, an agriculture extension agent (Anthony, Kacmar, & Perrewe, 2010). C. E Woolman was not a banker, venture capitalist or war pilot, as many of the competing airlines were. He didn’t have the aggressive military style that many of the other airline founders had.

What C. E. Woolman instilled within the employees at all levels of the organization is that people matter and should be treated fairly and equitably.

This philosophy led Delta Airlines to be the leader in customer service from the company’s inception through the many mergers over the years. Through the difficult financial times when other airlines were laying off employees and filing for bankruptcy, Delta continued to pay their people well and keep them employed. There was an exception during the Ronald Allen CEO era of 1987 thru 1997. Human relations took a significant down turn during his tenure as CEO, especially during 1993 and 1994, but Delta decided to part ways with Allen and began repairing those fragile relationships with its employees.

Delta Airlines still focuses on the human relations factor and has been able to repair the relationship with its employees; they believe it is their key to success. Despite the corporate culture to take care of its employees, a number of Delta employee departments are unionizing. They feel as though that piece is not being distributed justly. Formulate a strategy for negotiating a labor agreement Human behavior dictates that there will be problems. As a company starts making money, there is always a desire by the employees to acquire more of the profit.

On the other hand, management has a desire to retain as much of the profit to be provided to investors and to receive bonuses for their “supposedly” wise business practices. When one group wants more and another wants to retain, there will be conflict. And this is precisely what is happening at Delta Airline, as well as among many industries in the transportation arena. Employees, seeking to gain an upper hand threaten to strike; however, management must be willing to address the matter through negotiation. The Negotiation Process

Fisher and Ury recommend conducting negotiations according to the process of “principled negotiation. ” Their method has four main tenets: 1. Separate the people from the problem. The idea should be for both sides to work together to attack a problem, rather than attacking each other. To achieve this goal, it is necessary to overcome emotional responses and set aside egos. 2. Focus on interests rather than positions. The natural tendency in many negotiations—for example, dickering over the price to be paid for an antique—is for both sides to state a position and then move toward middle ground.

Fisher and Ury warn against confusing people’s stated positions with their underlying interests, and claim that positions often tend to obscure what people truly hope to gain through negotiation. 3. Generate a variety of options before deciding what to do. The pressure involved in any type of negotiation tends to narrow people’s vision and inhibit their creativity, making it difficult to find optimal solutions to problems. Instead, Fisher and Ury suggest developing a wide range of possible solutions as part of the negotiating process.

These possible solutions should attempt to advance shared interests and reconcile differences. 4. Base the result on objective criteria. No one will be happy with the result of a negotiation if they feel that they have been taken advantage of. The solution is to find and apply some fair standard to the problem in order to guarantee a mutually beneficial result. Fisher and Ury’s principles provide a good overall guide for the actual negotiation process. In his book, Nierenberg offered a number of other tips and strategies that may be effective in promoting successful negotiations.

For example, it may be helpful to ask questions in order to form a better understanding of the needs and interests of the other side. The questions must be phrased diplomatically and timed correctly in order to avoid an antagonistic response. The idea is to gain information and uncover basic assumptions without immediately taking positions. Nierenberg stressed the importance of listening carefully to the other side’s responses, as well as studying their facial expressions and body language, in order to gain quality information.

Nierenberg noted that good negotiators will employ a variety of means to accomplish their objectives. Small business owners should be aware of some of the more common strategies and techniques that they may see others apply or may wish to apply themselves. One common strategy is forbearance, or “patience pays,” which covers any sort of wait or delay in negotiations. If one side wishes to confer in private, or adjourn briefly, they are employing a strategy of forbearance. Another common strategy is to present a fait accompli, or come to a final offer and leave it up to the other side to decide whether to accept it.

In a simple example, a small business owner may scratch out one provision in a contract that he or she finds unacceptable, then sign it and send it back. The other party to the contract then must decide whether to accept the revised agreement. Nierenberg warns that this strategy can be risky, and encourages those who employ it to carefully appraise the consequences first. Another possible negotiating strategy is reversal, which involves taking a position that seems opposed to the original one. Similarly, feinting involves apparently moving in one direction in order to ivert attention from the true goal.

For example, a negotiator may give in on a point that is not very important in order to make the real objective more attainable. Another strategy involves setting limits on the negotiation, whether with regards to time, the people involved, or other factors. It is also possible to change the participation in the negotiation if it seems to be at an impasse. For example, a neutral third party may be enlisted to help, or one or two people from each side may be sent off to continue the negotiation separately.

It may also be helpful to break down the problem into small pieces and tackle them one by one. Another strategy might be to trade sides for a short time and try to view the situation from each other’s perspective. All of these techniques may be applied either to gain advantage or to push forward a negotiation that has apparently reached an impasse. Analyze the principle economic and administrative issues The airline industry is a fast growing sector demonstrating a very strong growth rate. It is associated with a number of social and economic benefits and is a growing contributor to the global inventory (Whitelegg, 2000).

Business cycles have a wide reaching impact on the airline industry; during recession, air travel was considered a luxury and therefore spending is cut which leads to reduced prices. The industry creates its impact not just by providing direct employment, but also through the creation of opportunities throughout the travel and hospitality sector of the economy. Jobs in hotels, resorts, restaurants and car rental agencies are all impacted by the airline industry (Global Airline Industry Program, 2011).

The airline industry itself is a major economic force, both in terms of its own operations and its impacts on related industries such as aircraft manufacturing and tourism. There are few industries that create the amount and intensity of attention that airlines receive, not only among its participants but from government policy makers and the media as well. The crucial issues on the table vary depending on whether the person is in management or is a worker. For management, the key to retain as much money as possible, while for the workers the goal is to obtain more of the profit.

Thus, in management, the argument would be made to show how much money is used to provide employee insurances and benefits, reinvest in equipment and aircraft, general property and liability. On top of that, investors must be repaid. For the employee or worker, this is a stressful environment where the employee needs to be compensated for his work-related stress. Employee paid benefits continues to decrease, and the employee is forced to pay a disproportionate share. Thus, the employee needs more money just to live at a sustainable level.

Recommend policies and procedures to administer a labor contract and resolve disputes. It is of utmost importance to resolve conflict expeditiously and justly for all parties involved. Thus, I would recommend the following policies as a means to resolve disputes: When a team oversteps the mark of healthy difference of opinion, resolving conflict requires respect and patience. The human experience of conflict involves our emotions, perceptions, and actions; we experience it on all three levels, and we need to address all three levels to resolve it. We must replace the negative experiences with positive ones.

Acknowledge the conflict – The conflict has to be acknowledged before it can be managed and resolved. The tendency is for people to ignore the first signs of conflict, perhaps as it seems trivial, or is difficult to differentiate from the normal, healthy debate that teams can thrive on. If you are concerned about the conflict in your team, discuss it with other members. Once the team recognizes the issue, it can start the process of resolution.

• Discuss the impact – As a team, discuss the impact the conflict is having on team dynamics and performance. Agree to a cooperative process – Everyone involved must agree to cooperate in to resolve the conflict. This means putting the team first, and may involve setting aside your opinion or ideas for the time being. If someone wants to win more than he or she wants to resolve the conflict, you may find yourself at a stalemate.

• Agree to communicate – The most important thing throughout the resolution process is for everyone to keep communications open. The people involved need to talk about the issue and discuss their strong feelings. Active listening is essential here because to move on you eed to really understand where the other person is coming from. Determine the most likely interest dispute and determine how you could leverage economic pressure to help resolve that dispute. “There is no way to overstate the role “leverage” plays when it comes to achieving favorable settlements. Leverage is defined as: “positional advantage; the power to act effectively; strategic advantage”. Stated more simply, your leverage is whatever power you have” (Cory, 2011). Leverage is usually more about situational advantage than objective strength or power.

For example, a single individual or small business may have few resources relative to a large corporation but still have situational advantage by virtue of being able to compel the larger corporation to appear and answer in a favorable venue. Likewise even when there is a legitimate claim which could result in a significant loss to the defendant, if the plaintiff does not have the resources or the fortitude to stay the course, then the defendant has the situational advantage by virtue of being able to delay and wait the plaintiff out.

Leverage can be real or imagined. Your actual leverage at any point in time is based only on the other side’s perception of your leverage (which can obviously differ significantly from the actual facts). There are obviously situations where you have an information advantage, such as when you know about a weakness in your case that is not yet known by the other side. In such a situation you will, perhaps only briefly, appear to have more leverage than you actually do.

Likewise, you can be at an information disadvantage such as when you mistakenly think that the other side has a stronger case than they actually do. There are also situations where you mistakenly think that your case is stronger than it actually is which occurs when for one reason or another you don’t have all the facts, or when the facts have not been accurately relayed to you. But regardless of your actual leverage, if there is no fear on the other side, you have little if any effective leverage (Cory, 2011).

Cathay Pacific Essay

Cathay Pacific Essay

HistoryIn 1946 two ex air force pilots Roy Farrell and Sydney de Kantzow founded Cathay Pacific in Hong Kong. Both of them contributed HK$1 so that their new found airline could be registered. Even though at first it was based in Shanghai, both founders shifted to Hong Kong where they established Cathay Pacific.

According to Gavin (1988) 1960 was a good and prosperous year for the airline as they bought their rivals Hong Kong Airways. By 1964 it had more then a million customers. The and by 1967 they were unlimited customers.

In the same era it also bought its first jet engined aircraft. It was the Convair 880. It seemed as if here was success after success because soon after buying the new aircraft they introduced their international flights.

Cathay Pacific seemed to be soaring high as in 1999; a new head office was established in Hong Kong International Airport. They called it the Cathay City. Till today Cathay Pacific holds his head up high when it comes to quality service and success in the airline industry (Ashok 2003 p110)Part 2SuccessCathays success has based on her wide-range of service all around the world especially in Asia, and modern management orientation and employees from over ten countries.

In every country their service is considered as quality service as they always make the customers journey pleasant one.

The reason why Cathaywas so successful is that it has always believed in quality customer care and new strategies. They know what those successful in the past may not make them successful again as the world keeps changing. They believe that is their employees and human resource which make them successful.

Their success lies in the airline’s corporate philosophy which is “service straight from the heart” and determination for constant improvement (Chan 2000 p473). They believe that they have to deliver the best service and fulfil all the requirements of the passengers so that they have a pleasant journey

Part 3

Company StructureLike in most organizations here too top management, technical support staff , middle management, administrative support staff and technical core are interrelated and serve more then one function.(Daft 2007 p27)

The company structure of Cathay Pacific is not a complex one. The head of the organization is the chairperson this case it is Chris Pratt he joined the company in 1978. Then is the Tony Tyler the executive director. He directly reports to the chairpersonAll heads of the all the departments report reports directly to both the chair person and the executive director.

John Slosar is the Chief Operating Officer he is the head of the most important department which is the operations departmentAfter the operations department the next important department is the Corporate Development department. The head of this department is Ian Shiu,The next important department is the Finance department. The director of this department is James E. Hughes-HallettThe next most important department is the Flight Operations department Nick Rhodes is the director of this department.

The next most important department is the Sales and Marketing Department. James Barrington is the head of this Department.

The next most important department is the Personnel department. The head of this department is William Chau.

The next most important department is the Information Management department. Edward Nicol is the head of this department.

The next important department is the Cargo Department. Rupert Hogg is the director of this department.

Another important department is the corporate Affairs department. Quince Chong is the head of this department.

Yet another important department is the service delivery department Ivan Chu is the head of this department.

Last but not least is eth engraining department. The head of this department is Christopher Gibbs


Ashok Ranchhod (2003); CIM Coursebooks 2002-2003 Diploma Case Study Book: Analysis and Decision (CIM Workbooks 2003/04) Butterworth-Heinemann; Revised edition p110Chan D (2000); Air wars in Asia: competitive and collaborative strategies and tactics in action Journal of Management Development , Vol 19 : 6 Pp473 488Daft, B.L. (2007); Organisation Theory and Design, 9th. Ed., South-Western p27Gavin Young (1988) ;Beyond Lion Rock: The Story of Cathay Pacific Airways Hutchinson Radius.

Trans World Airlines (TWA) Essay

Trans World Airlines (TWA) Essay

Before Trans World Airlines (TWA) had expressed its interest to acquire Ozark Airlines (Ozark), it had already established itself so it will achieve dominance once the merger took place. The company initially equipped itself with knowledge and resources that will bring them to an advantage over Ozark.

TWA went through three primary agreements prior to the acquisition on which it had displayed aggressive influence on all of them. In the Wraparound Agreement, TWA pilots used threats so they can have complete participation in drafting the merger terms with Ozark.

They warned that they will withdraw their membership in the Air Line Pilots Association (ALPA) if the terms will not be drafted to serve their best interest. This control over the acquisition terms was amplified when TWA pilots and ALPA made an agreement with Icahn (the biggest stockholder of TWA) that they will “extend the wage and benefit concessions” in exchange for full influential power over the details of the merger agreement (Pierce & Dougherty 146).

The “threat” strategy was also used to compel Ozark pilots to sign the contract under the merger agreement. An Ozark respondent described that TWA had threatened to take additional 10 airplanes on top of the 4 already acquired and to lay off more pilots if the contracts were not signed.

The same strategy was also used so TWA will obtain compliance among Ozark employees. The former had instilled the concept of it being a “big airline company absorbing a small airline company.” Hence, the latter as the “small company” should submit to their authority.

Another communication practice used by TWA to display its dominance is by branding the employees. Branding was defined as the manner of creating a distinction between a TWA employee and a former Ozark employee. In databases, for example, Ozark employees were reported to have an asterisk symbol or big red letters “OZARK” beside their names. It appeared that though the two airline companies had merged, an internal division was still maintained.

The “branding” also implied certain restrictions for the Ozark pilots. Contractual boundaries were set. These were referred to as “fences” (Pierce & Dougherty 150). A TWA pilot attested that there were existing contracts that restricted former Ozark pilots to fly some of the aircrafts until a specific seniority level on TWA standards was acquired. Training opportunities for former Ozark pilots were also very low. With these restrictions, a seniority level which means better wages, benefits, equipment assignments and cockpit positions will be difficult or will take a longer time to attain for former Ozark pilots.

The division was an accepted fact for both TWA and former Ozark employees. To further demonstrate this reality, both parties still display their distinctive badges, colors or pins. Some even had symbolic tattoos on their bodies.

Pierce & Dougherty interpreted this as an approach by the dominated party to display resistance (152). Through their unique colors or pins, former Ozark employees reinforced their identity amidst TWA’s dominant structure. Some former Ozark pilots also exhibited their identity by not adopting TWA’s flying standards. These forms of resistance may not have altered TWA’s dominance but former Ozark employees had gained their own source of personal power by identifying themselves as “Ozarks” (Pierce & Dougherty 154).

Through the case study made by Pierce and Dougherty which tracked the pre-acquisition and acquisition of Ozark by TWA, it was established that power-as-domination can be created, enacted and maintained through communication processes (157). TWA’s behavior was seen to be very influential from the very start. Since they were at an advantage when it came to resources and size, they were able to threaten other organizations such as ALPA to get what they want and how things should happen. Former Ozark employees also feared these threats and had no recourse but to follow what TWA mandated to avoid losing their jobs.

It is evident from the case study that TWA made no effort to erase the division that resulted from the apparent disparity with the former Ozark employees. Instead, they reinforced the situation by further defining limits hence preventing any opportunity for the former Ozark employees to step up from their places and be an equal. This, as it appeared, was a way to preserve the status quo which had TWA as the dominating company.

Pierce and Dougherty, however, described this situation as very unhealthy. They said this fosters a negative environment, lower productivity and lower commitment among the employees especially toward the parent company (157). From the authors’ observations in the workplace, TWA pilots and former Ozark pilots rarely interact as one group. Conversations were usually brief and only because urgency or necessity.

The lack of unity was all the more evident by the different colors, pins or badges that the employees displayed to show the airline company where they had originated. Some former Ozark pilots also refused to follow certain standards as they do not conform to what they had been doing in the past.

Pierce and Dougherty recommended that managers should not tolerate such differences within the company that came from a merger. The merging of two companies should be seen as a partnership not as “one company swallowing another” (158). The merger should invest on the strengths of both companies and strive to develop a better combined company that can compete with any similar company in the world.

In the process of recognizing the contribution of each individual employee, whether he/she is a TWA employee or a former Ozark employee, communication processes that exhibit power imbalances will be minimized or will even be non-existent. Threats will no longer be necessary to achieve compliance and commitment. Instead, there will only be one airline company achieving its targets from the combined powers of TWA and Ozark.


Pierce, Tamyra & Dougherty, Debbie S. “The Construction, Enactment and Maintenance of Power-As-Domination through an Acquisition: the Case of TWA and Ozark Airlines.” Management Communication Quarterly 16.2 (2002): 129-164.

Southwest Airlines Essay

Southwest Airlines Essay

Southwest Airlines (SA) was founded in 1971 after a careful market analysis. Its founders believed in a low cost strategy. Through the Wright Amendment, which not only prohibited any air carrier from offering direct service into Love Field from any place beyond Texas and the four contiguous states of Oklahoma, Louisiana, Arkansas, and New Mexico, but also made more difficult the life of passengers coming from outside theses states and forbid the advertising to flights coming from Love Field, the competition made SA adopt a differentiation strategy.

The U.S. Airline Industry Essay

The U.S. Airline Industry Essay

The U.S. airline industry provides a unique service to its customers. It transports people and goods with efficiency and convenience which is not achieved by any other service. The purpose of this article is to collect data on the U.S. airline industry and analyze the state of the industry today. Data came from sources such as the Federal Aviation Administration, scholarly articles, and websites such as and Tools used to analyze the data include P.

E.S.T., and Porter’s five forces. The analysis also focuses on the industries’ drivers of change and its key survival factors.

Key Survival Factors Include

Locations that an airline services – The servicing of particular markets is essential in the nature of the airline industry. Airlines need to offer routes between markets that are desired by customers. Cost structure of an airline’s operations – The costs of operations for an airline are a limit to how low airfares can be.

Costs include maintenance, fuel, labor, fees and lease payments for operating in airports. Those airlines that are able to control costs can attract customers with lower fares and can improve overall profitability. (Site this web article here An airlines’ workforce and its interaction with customers – A Pleasant workforce can encourage repeat business. An unhappy workforce can drive customers away to rivals.

Reliability of Service – An airline with a reputation for reliable service has a positive image among customers, which can lead to repeat business. Issues with reliability include mishandled baggage, the on-time arrival of flights, overbooking flights, and passenger complaints. Those airlines that are able to control these elements provide better service to the customer.

Drivers of Industry Change

Consolidations and Alliances – Many airlines operating in the U.S. have recently consolidated due to high competition and improper cost structures. These newly consolidated firms are also establishing alliances with international carriers which enable them to expand their market participation strategies. Globalization – Growth potential in the global travel market has led to a drive for globalization in the airline industry. U.S. airlines are lobbying for “open skies” treaties between the U.S. and other nations. The U.S has signed more than 60 open skies treaties with nations around the globe.

Low-cost Competition – The rise of the low-cost carriers has forced a change in the competitive environment of the airline industry. Southwest, JetBlue, People Express and Airtran operate off of low-cost strategies that allow them to offer lower airfares. These low fares put pressure on the industry and force rivals to lower their costs to stay competitive. (

(P.E.S.T.) Political, Economic, Social, and Technological forces that impact the industry.

Security Regulations from FAA
War on Terrorism led to stricter guidelines
Customer Protection Regulations – must show fees ( Economic
High operating costs
Airlines merging
Fuel Costs are huge
Less people traveling due to expense
Very high fixed cost
Impact of holiday travel
Cancellation fees/checked bag cost
Security – Is it safe to fly?
Customer service (friendliness, flight attendant/pilot being funny) Technological
Business changes (using Skype instead of traveling)
Buying tickets online/cancel online

Porter’s Five Forces Model – is one way to analyze the environment in which airline companies operate. This model shows the major forces that form the industry: threat of new entrants, bargaining power of buyers, threat of substitutes, bargaining power of suppliers, and competitors. Threat of new entrants is relatively high in the airline industry. It seems like it would be hard to enter the airline industry due to the large amount of fixed costs however lending has made it not only possible but fairly simple. New entrants will have to endure years of little or no profit until a strong customer base is established though. Meanwhile existing companies will be able to lower prices and take losses against their capital reserves just to drive a new competitor out of business. Further, consumers prefer well-known brands mainly due to safety concerns.

Lastly, stringent licensing requirements and heavy regulations by organizations such as the Federal Aviation Administration and the Department of Transportation require significant knowledge base and time investment on the part of the new entrant. Bargaining power of buyers is also relatively low in the airline industry. Two main groups of buyers exist: individual buyers purchasing tickets for personal or business travel, and travel agencies and/or online portals that work as a “middle man” between the airline companies and individual buyers. There is definitively a large amount of buyers compared to the number of airlines; therefore, loss of one customer does not strongly affect the bottom line of a given airline. Typically, each airline has a niche. Some airlines focus on cost, while others focus on having the best amenities, etc.

Although switching costs are low for buyers, they tend to remain within a niche and purchase tickets based on their price vs. amenities preferences. Threat of substitutes is medium in the airline industry. Consumers can choose other forms of transportation such as a car, bus, train, or boat to get to their destination. However, there is a cost to this switch, mainly time. For long distance travel, airlines usually exceed all other forms of transportation when it comes to cost and convenience. Nevertheless, there is one important development that should be noted – technological advances are allowing business people to telecommute, this significantly cuts down on required business travel. Bargaining power of the suppliers presents a medium threat in the airline industry. Major suppliers include the airplane manufacturers, aircraft leasing companies, fuel companies and labor unions. Although airline companies cannot easily switch suppliers, most firms have long term contracts with their suppliers.

On the other hand, there are very few suppliers in the airline industry because of the amount of money and expertise required. Airlines represent the main source of income for these suppliers so airline’s business is extremely important to them. Rivalry among existing players is very strong in the airline industry. The first reason is the fact that the airline industry is currently stagnant; the number of competitors remains more or less the same and the industry does not have overcapacity. The fixed costs are extremely high and it is hard for an airline firm to leave the industry because of the long term debt obligations. The rivalry is reduced by the brand identities of different airlines.

Some are known for exceptional amenities, others for low prices. The market seems to be equally divided as each company maintains its own niche in the market. Highly competitive industries such as the airline industry typically see low rates of return due to the fact that they competition drives down prices. Couple this with the high amount of government regulation in the airline industry and the investor may be weary of investing in the industry. However, the next five years look promising for the U.S. airline industry due to the fact that many of the participant firms will be newly consolidated and have influence in markets outside of the U.S. as well as those inside.

British Airways Essay

British Airways Essay

In 1987, British Airways was privatised, and over the next decade turned from a loss-making nationalised company into “The World’s Favourite Airline” – a market-leading and very profitable plc. The strategy that transformed the company into a marketing-led and efficient operation was conceived and implemented by Lord King as Chairman, aided by Sir Colin (subsequently Lord) Marshall: two tough businessmen who confronted staff inefficiencies and so improved service effectiveness that BA was rated international business travellers’ favourite airline for several years in the 1990’s.

Lord King having retired, Lord Marshall became Chairman and was succeeded as Chief Executive by Bob Ayling, a long-time BA manager.

Ayling set in train a strategy to turn BA into a “global” airline – transcending the “flag-carrier” status (the role of a nation’s leading airline) it shared with Air France, Lufthansa, Swissair, Alitalia, Iberia – into an airline with no “national home” operating throughout the world. The dropping of the overtly “British” heritage and associations was reflected in a changed brand strategy.

Away went aeroplane liveries featuring the Union flag, to be replaced by tailfins bearing themed designs from around the world. This was to address the “global traveller” a savvy (mainly business) customer whose criteria for purchase were service levels, range of destinations, promptness – not price.

But the re-branding became a debacle. Customers, staff, alliance partners, shareholders and retailers (travel agents) all liked the British heritage and imagery and rebelled against the turn to an anonymous, characterless new style.

Ayling also focused on cost-reduction programmes which antagonised and demotivated BA’s staff – and customers noticed the deterioration in behaviour of staff whose commitment to customer service suddenly plummeted.

The upshot was that Ayling was ousted in a boardroom coup in March 2000. During his reign, a loss of 244m in the year to March 31 2000 – the first since privatisation – was recorded and the group’s market value had fallen by half.

A New Face.

In May 2000, Rod Eddington joined BA as Chief Executive. He was previously Managing Directory of Cathay Pacific and Executive Chairman of Ansett, an Australian airline.

Eddington’s immediate actions were designed to restore profitability to BA’s operations – and to restore the Union Flag to BA’s planes! He set about reducing the fleet, moving to smaller aircraft, cutting clearly unprofitable routes. He also targeted “high-yield” customers, the traditional mainstay segment for BA. Matching supply with demand was the overall concern, to restore positive cash flow.

Strategically, BA’s longtime search for a merger partner was resumed. A link with American Airlines, the first choice partner, was out of the question after US regulatory authorities squashed the idea. A proposed merger with KLM, the Dutch flag carrier, was discussed in some depth, but that foundered on doubts over the long-term financial benefits, and arguments over the relative shares each airline would have in the merged company.

Low-Cost Airlines.

Meanwhile, the airline industry was undergoing a seismic shift with the rise of low-cost “no frills” airlines. Ryanair and easyJet had, at first, demonstrated the existence of a new market for cheap airline travel which had not been tapped by traditional airlines. But then they began to expand and to compete for passengers that normally would have gone to BA – even business class customers couldn’t see the reason “to pay £100 for breakfast” (the difference in price between BA and easyJet between London and Edinburgh.)

BA’s response (under Bob Ayling) was to form GO as a direct response to the no-frills competitor. Operating out of Stansted airport, GO was operated
entirely separately from BA, so none of the high-cost culture was inherited. Launched in the face of vociferous opposition from easyJet, GO nevertheless established itself in the market – though at what cost, no-one could guess.

Rod Eddington soon decided that his focus on premium customers made GO’s operations inconsistent with that of BA as a whole. GO was sold in May 2001 for £100m to 3i, a UK venture capital and private equity group.

GO was subsequently sold on to easy Jet for 375m.

However, the driving of aggressive strategies from budget airlines is still forcing flag-carriers to re-assess their business models.

The Outcome.

For the year ended March 2001, Eddington’s steps had yielded a quadrupling of operating profits. Market share on key routes had been lost as cuts in fleet and routes bit, but BA believed it had lost customers who paid deeply-discounted fares. BA continued its vigorous pursuit of high-yield passengers.

September 11th.

So, all seemed to be going well. The brand was being restored, financial performance was improving and the only real problem was lack of progress on forming a partnership with a US carrier, prevented by the regulators. Then came September 11th, and the airline market fell apart. The consequences were swift – passenger numbers fell 28%, US airports were closed for a week, Swissair, Sabena, US Airlines and nearly, Aer Lingus, went bust. Alitalia lost 570m, Lufthansa 400m. Altogether the industry lost 7bn and shed 120,000 jobs – 13,000 at BA – and passenger numbers are still running at 13% below normal on transatlantic routes.

In contrast, passenger numbers and financial results at low-cost carriers – easyJet and Ryanair – were rising impressively.

Then came Sars, the Iraq war and the continuing sluggishness of the world economy, all deeply damaging to passenger numbers.

Strategy at BA was thrown into disarray.

Current Strategy.

With the travel market is still subject to “global economic and political uncertainty”, BA has repeated its forecasts for lower revenues. However, the “fundamentals of this business are stronger than they have been for four or five years” John Rishton, Finance Director, says BA is generating cash, and is conserving that cash. (FT and D.Tel. 6.11.02).

The operational imperatives to cope with the turbulent environment are expressed in BA’s “Future Size and Shape” initiative which is intended to:

– Achieve significant cost reductions. Originally targeted at 650m, the cost savings are now expected to save an annualised £1.1bn over 3 years (FT 19.3.03). Simplified operations and minimal overheads is the aim.

– Cut capacity, to match supply of aircraft and flights to the reduced demand.

– Cut staffing levels. A further 3,000 job cuts planned for March 2004 have been brought forward to September 2003.

– Change BA’s business model. Aware that no-frills competition is not going to go away, but that BA possesses a positive service heritage, BA wants to create an offering that combines the best bits of BA and the no-frills model. Martin George, BA’s director of marketing and commercial development, explains “our customers like the BA product – convenient airports, high frequency, good level of service – but want it at the right price, and that’s what we’ll give them. It’s about changing our business model to allow us to compete profitably” (Management Today, September 2000).

– Rationalise BA’s internal UK and short-haul business – CitiExpress has been formed from the activities of subsidiaries Brymon, BRAL, Manx and BA Regional. To stem heavy losses on this short-haul network, some rationalisation has been done – it has pulled out of Cardiff and Leeds-Bradford airports, and will cut its current fleet from 82 to 50 all-jet planes by end-2005. However, it is expanding operations from Manchester, and from London City airport to Paris and Frankfurt. (FT 18.12.02).

It is recognised that BA started to take the bitter medicine of cost cuts and restructuring earlier and in bigger doses than rivals in Europe and North America, and that Rod Eddington has pushed through changes that were long overdue. But is this enough? – can BA wrest back the short haul market from easyJet and Ryanair, while maintaining its position in the longhaul market…………………


In July 2003, just at the start of the busy holiday season, BA was hit by an unofficial strike by Heathrow check-in and sales staff who were objecting to a hasty introduction of a swipe-card automatic clocking system. 500 flights were cancelled, affecting 100,000 passengers. The damage to BA’s service reputation was enormous.

Both management and union leaders were taken by surprise, and it brought to a head the existence of restrictive practices going back 40 or 50 years which both sides have to confront.


Results for the year ending 31st March 2003 showed a pretax profit of 135 on turnover down 7.8% to £7.69bn, up from a loss of 335 in the year to March 2002. The results included a charge of 84m for the planned ending of Concorde flights in October, and a fourth-quarter loss (January to March) of 200m. These positive results were entirely down to cost reduction. No dividend was paid – a consequence of the need to conserve cash. Operating margin at 3.8% is way below Eddington’s target of 10%. (D.Tel, 20.5.03, FT, 21.5.03).

In the first quarter of the 2003-04 year, a pretax loss of £45m was incurred – the effect of the Heathrow strike was put at 30-40m.

The business environment.

However, Rod Eddington sees the furure business environment as very hard to read, but expects it to get tougher. 2003-04 was meant, according to analysts, to be BA’s year of recovery, but it is not now expected to happen. (DTel, 11.2.03)

A critical development is the start of talks between the EU and the USA to dismantle the web of regulations that have controlled the development of international aviation since the mid-1940’s.

Eddington, as chairman of the Association of European Airlines, insists that truly global airlines are impossible in the current regulatory environment. “If it were left to the market, international airlines would undoubtedly follow in the footsteps of other industries and would seek the benefits of scale and scope that are currently denied them. A truly global airline…..would be free to operate wherever its customers demanded, free to grow organically or through acquisition and free to charge whatever the market would bear.”

These talks are likely to be very long. However, it potentially offers the opportunity for an opening of the two biggest airline markets and lead to substantial consolidation of participants. (FT, 29.9.03).

The takeover of KLM, the Dutch flag carrier, by Air France, may be the precursor to the consolidation expected. BA sees no threat from what is now Europe’s largest airline. D.Tel, 1.01.03).

You may also be interested in the following: british airways organisational structure