The first thing the airline must do is look at the firm supply. If they are to continue the flights from those two hubs then they must determine if at some point in the long run the firm must be profitable or should exit the market. (Brickley et al., 2009, p. 181) Since I would assume that the costs of that route would be quite high it would appear that it would be extremely difficult for them to make a profit especially since there are lower cost airlines that customers could do business with. A competitive firm should produce
Defend your choice. At that time, Boeing’s major competitor Airbus also has a big project – Airbus 380 program which has a seating capacity between 525 and 853. This is a big threaten to Boeing. Meanwhile, Boeing wants to achieve several goals with innovation approach which are reduce cost, development time, and unique characters (fuel-saving, less time needed for maintenance, new technology). Boeing want to change the rules of the way large passenger aircraft were developed through its Dreamliner program.
TITLE OF ASSIGNMENT CRAFTING AND EXECUTING STRATEGY STUENT MOHAMMAD HOSSAIN INSTRUCTOR DR. RHONDA POLAK COURSE TITLE STRATEGIC MANAGEMENT –BUS 599 DATE: - OCTOBER 16, 2011 Discuss the trends in the U.S. airline industry and how these trends might impact a company’s strategy. Trends in the US airline industry have an impact the performance and strategies of the airlines. As a result, the Jet Blue has struggled to survive. The trends of U.S. airlines industries are discussed as follows: (1) Increased crude oil pricing: fluctuations crude oil price lead to passenger fees for revenue generation, This dramatic price increase caused airlines to struggle to offset the cost of fuel. Presently, gas prices have dropped.
Making travel to these areas much more expensive than what is really necessary. Quite possibly making the cost to these areas for travelers so much more expensive than most would be willing to pay. This could just be a ploy for the airline to stop this flight service from San Francisco to Washington, D.C. because they are in fact not making enough to cover the fuel and crew costs for these flights. Rather than announce the cancellation of this service themselves, they could be feeding information to the WSJ to help get the word out that they plan to stop this service in the near future. And this article is helping them to plant that seed.
JetBlue Airways: 5 forces and VRIO Porter 5 forces Analysis for JetBlue Airways: Threat of New Entrants: Moderate Deregulated industry. Threat of new entrants higher during downturns in industry (e.g. JetBlue’s entry point). Existing airlines may encroach on an opponent’s major or regional market-share. High cost of entry into industry Potential Competitors: Low - Rivalry among existing firms is intense, which affect the profits to be low.
In addition, airplanes re-orders were being rescheduled. Rising fuel prices consolidation - Cost pressure – resulted as there was a decline in the industry as a whole. Increasing competitive intensity – Airbus, Boeings competitor, offered the same airplanes at cheaper costs. 2. What is the e-Enabled Advantage?
EasyJet- Case Study 1 Q1. Analyse the structure of the industry in which easyJet competes. How attractive was the industry in the late 1990s? The core objective of easyJet was to establish a sustainable mode of air travel at a price that would be comparatively cheaper to its rivals. By using a framework by (Porter 1980) we can illustrate the compatibility of such a strategy in the existing aviation industry Potential Entrants Despite the high volume of new entrants during the period of easyjet’s inception, only a minority were actually able to survive.
Jack Johnson Johd Jackson College Composition II October 11, 2010 Outsourcing America Eliminating or reducing American companies trend towards outsourcing could lower the unemployment rate and expedite the economic recovery. Outsourcing is one of the major causes of the current economic collapse. Outsourcing takes jobs away from Americans, and without the ability to work it further reduces the disposable income that is greatly needed in order for the public to buy goods and services. These are the goods and services that will fuel the economic growth that is necessary for recovery from the current downturn in the economy. When you outsource, or offshore, jobs you also eliminate the American workers ability to pay for consumption.
Advances such changing engines from piston to jet engines and new software allows aircrafts to function more efficiently with less wear and tear and for longer period of times. Additionally, Delta’s changes in depreciation from 1986 through 2006 had a positive effect on the company’s financial statements. Although depreciation does not affect cash flows or revenue, it does have an effect on the bottom line. By stretching out depreciation, Delta decreased its depreciation expense resulting in higher net income. This is very beneficial for Delta; the airline industry is always being pressure to show more profits and results.
IPO is the first sale of shares to the public by a private company like JetBlue. Whether going public is very important because JetBlue can obtain large amount of capital to fund its growth and expansion (i.e. purchase new aircrafts) and to offset the portfolio losses by the venture-capital investors, and JetBlue can also be able to get potential future benefits (e.g. quickly raising large funds from the public and obtain favourable terms from debtors) from listing by changing the debt to equity ratio. Meanwhile, going public can also increase the publicity of JetBlue and attract more potential customers, which may result in a greater market share of JetBlue in the airline industry.