Before becoming captains, pilots must earn sufficient fly hours. However, flying schools do not have enough instructors to train enough new pilots. In response, the airline industries face increase labor costs as they raise pilot salaries in order to attract pilots. (3) Post 9/11 Aviation Security: after the 9/11 terrorist attacks, Congress passed the Aviation and Transportation Security Act (PDF), which created the Transportation Security Administration (TSA) and mandated that federal employees be in charge of airport security screening Jet Blue was a discount airline carrier. It offered passenger law fares; operated point to point system.
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.
The whole airline industry were running in to negative profits and many major airline corporations were operating under the bankruptcy protection except Southwest airlines and JetBlue airlines which was through its efficient management strategies and its emphasis on low fares . This was due to the terrorist attack on September 11, 2001. The customers feared to use air transportation and thus the domestic yields dropped almost 20% and stayed low until 2005. JetBlue saw its worst nightmares in the year of 2007 after more than 1100 JetBlue flights were cancelled in February which was then followed by sharp rises in fuel costs thus raising the operational costs .David Barger who was the president and COO of JetBlue was promoted as a CEO in 2007. The board was concerned about the situation and David Barger who was the President and COO of JetBlue during that time was appointed the new CEO of the company at its corporate headquarters in Forest Hills, New York.
(Isadore) Furthermore the recession had seriously reduced both vacation and business travel. (Adams) Management expects the merger to achieve synergies to make the companies more profitable in the future. Management believes that, “Northwest's fleet lets Delta choose from a bigger menu of jets seating 175 to 400 fliers. We can move these aircraft around the globe — from the Pacific to Africa, for example — and put those in the right spot," Delta Senior managers believe, "Delta and Northwest are a perfect fit," and the new combined aviation firm could create, “the opportunity to have the No. 1 or No.
I. KEY ISSUE In 2007, the CEO of JetBlue Airways, David Barger, faced an immediate survival issue as the company struggled to overcome a major operational failure during a difficult time in the airline industry when fuel prices were increasing tremendously and the profitability levels were low. Barger knew he should move quickly to maintain the confidence of customers, employees, and shareholders. He considered the option of reducing either E190 or A320 deliveries in order to maintain low costs as the company was not ready to continue growth in the E190 regional market segment. II.
Bombardier is highly leveraged with a high debt to equity ratio and minimal working capital. The financial position of Bombardier make it much more sensitive to risk than Embraer and less able to withstand any financial duress which may result from an unsuccessful new product. Bombardier has two successful airframes that have been in service for many years, the CRJ and Q Series. New versions of these airframes have been developed over the years to allow the company to continue to compete in the regional aircraft segment. The announced CRJ 1000 is the latest iteration of the CRJ serious and would allow Bombardier to compete against the Embraer 195in the 100 seat segment where it currently does not have a
The core concepts of Jet blue lay mainly customer value and product leadership. Jet blue operates under a concept of offering a lower, more affordable option to consumers while not letting the value affect the levels of service. The accessibility of the airline creates an aura of extended service by providing contact to limited locations that traditionally can only be reached with the sacrifice of high fares. In order to make logical profitable, business model Jet blue operates an efficient load factor by maximizing the percentage of aircraft seating capacity. (Jet Blue, 2005).
Case Analysis Southwest Airlines EXECUTIVE SUMMARY Southwest entered the complicated airline industry in Dallas, Texas in 1971 and ever since has been exceeding everyone’s expectations with unprecedented strategies. Southwest focuses on customer satisfaction: get the customer where they want to go, with low fares and have fun doing it. Their low cost strategies have been accomplished by reducing a large majority of the input costs that most large airline carriers incur causing those large airlines to charge heavily for fares. Southwest’s customers know that they won’t be given the same costly luxuries that other airliners carry but they don’t seem to mind much based on Southwest’s continued year after profitable year. In addition, Southwest has received multiple awards in outstanding customer service compared to all other airliners.
JetBlue’s strategy for success is product leadership with customer value proposition. With their strategy they promise their customers high-quality customer service at a low fare on primarily point-to-point routes. This is evidenced by the fact that JetBlue has one of the largest load factors in the United States. JetBlue implements this strategy by having a productive workforce, having low distribution costs, flying the same type of aircraft, and utilizing their aircraft effectively. What business risks does JetBlue face that may threaten the company’s ability to satisfy stockholder expectations?
As stated in the report itself JetBlue, "provides high-quality customer service at low fares, primarily on point-to-point routes" (JetBlue, 2005). Further evidence of the company’s success is their efforts to offer low-cost alternatives to customers by serving "underserved and large metropolitan areas that have had high average fares" (JetBlue, 2005). Due to reasonable and fair customer service measures like this, JetBlue has aircrafts with the highest number of seats occupied in any given period. What business risks does JetBlue face that may threaten the company’s ability to satisfy stockholder expectations? What are some examples of control activities that the company could use to reduce these risks?