Last year, because the price of oil had raised to $150 a barrel many CUPE members lost monthly flying time. To cut its losses, the airline has already cancelled many flights to US and European cities. It look this is not going to be easy year for our domestic air line. Beside, surviving harsh economy, Air Canada has to also co-operate with the union. Disagreement with workers can make things much
There are several options available for customers to choose in this industry because the standard product and service are in this industry, so customers are more care about the price. And also the Internet makes customers research cheaper flight much easier than before and switching cost is low. The threat from substitute is high. Numerous options for customers can instead airlines, such as trains, buses, boats, and personal vehicles. Customers usually desire a cheaper way to travel if there are many options for them.
Presently, gas prices have dropped. However, the airlines continue to pass along the fees to its passengers to increase revenue. Clearly, the fees that began originally in response to fuel prices continue to be part of the revenue generating strategies of airlines. (2) Shortage of Pilots: As baby boomers retire by the thousands, the airline industry is experiencing a shortage of pilots. Before becoming captains, pilots must earn sufficient fly hours.
As delays will often frustrate travellers, this can make WestJet that traveller’s top choice. An order winner is the low price fares that WestJet is able to provide to customers in order to entice them to fly with them. Bargain-basement airfares may appeal to many travellers and the affordability of fares may be what drives that traveller’s decision on whether to drive, or purchase from another airline. 2. WestJet’s competitive priority relates to cost, quality and delivery.
The company has suffered more losses than profits. Jobs were cut; benefits have been scaled back, and the pilots of American Airlines are paid a lot lower salaries than their competitors. Many of them have been furloughed. All of these and many other factors have contributed to American deciding to create the world largest airlines with US Airways. In this essay, I will discuss the circumstances that resulted in the merger, assess the significant positive (or negative) effects of the merger, and examine the organizational structure that has resulted from the merger.
Price discrimination also shows signs of oligopolistic firm , as prices are set for different genders, age, time, season, due to lack of competition and choice. The firm is then able to charge a higher price to the group with more price inelastic demand and lower
Air Canada: Flying High with Information Technology case analysis Air Canada is the largest airline company in Canada serving to 35 million passengers annually and providing direct passenger service to more than 175 destinations worldwide. As we know, airline companies’ day-to-day activities, such as ticket booking, customer service, cargo and other operational functions, are hugely dependent on information technology. That is why, as it is mentioned in this case study, Air Canada has used the capabilities of IT to solve their company’s problems. The first issue was to cut costs and gain efficiency. To solve this problem Air Canada outsourced the whole IT department to IBM and other vendors, except the core IT group to monitor the company’s IT standards and policies.
Based on the book when there are competitive markets such as airlines, a company certainly needs to look at costs and revenue very closely. (Brickley, Smith, & Zimmerman, 2009, p. 180) In this case I believe that the flights from San Francisco t Washington DC should be discontinued. Even though United Airlines is a large company and profitable if they continue these flights in the long run they will lose money. The other option that they would have would be to increase the fares to cover those costs, but since the airline industry is a competitive market people are more likely to go with a lower cost airline. The first thing the airline must do is look at the firm supply.
However, Southwest Airline also expand their business to long- distance domestic airline and international fight in recent years, and they successfully enter the new area with the low- price advantage. Section 2: External Analysis Southwest Airline is the 4st large airline company in United States, but it is the most profitable company. Even though after 9.11 terrorists attacked happened, Southwest still kept their airline business in a good position. And in 2011, when the U.S stock market decreased, Southwest Airline decided to buyback the stock , which shows the confident they had. However, Southwest Airline are affected by business related issues.
Many firms filed for bankruptcy or were acquired by other firms. Secondly, the way American Airlines had been pricing tickets was not sustainable. Nearly 85% of all tickets sold went through a travel agency, where travel agents made their livings based off commissions. The complex fare structure meant that American Airlines had over 500,000 different fares for tickets. Also, value pricing would help American Airlines lower their chances of incurring costs from overbooking.