Case Summary and Important facts Despite the fact the airline industry had 87 new-airline failures in the US over the past 20 years. David Neeleman convinced a group of investors and quickly raised $130 million from venture-capital community. With its strong capital base, JetBlue acquired a fleet of new Airbus A320 aircraft and focused on innovation, providing the most valuable and the most excellent travel experience, low-cost, point-to-point service to large metropolitan areas with high average fares or highly traveled markets that were underserved, mainly on central and Western routes in the US. During 2001 and 2006, the airline industry was facing a number of external stress, such as the 911 terrorist attacks, Iraq War, SARS, high price of petroleum, ect. The airline industry in US has been challenged and many of firms were bankrupt.
Airbus A3XX: Developing the World’s Largest Commercial Jet 1. What are the main factors determining the profitability of the A3XX project? Number of planes sold per year – The first and most important factor determining the profitability of the A3XX project is long term demand. This is measured by the number of planes sold/year. In 2000, both manufacturers believed that Asia would register the world’s highest growth rate over the next 20 years.
(Data taken from Exhibit 9, detailing passengers for regular and discount flights.) o This forced southwest to alter pricing in June 1972, raising fares to $26 one way / $50 round trip. From Exhibit 8 we see that Operations and Maintenance also increased $18 so the revenue was needed was approximately $800 per flight. With the new fare, Southwest needed between 31 and 32 passengers per flight for a break even point
Does it have competition from any other manufacturer of wide body twin aisle aircraft? If there are substitutes for the 787 Dreamliner, how would it affect the cross elasticity for its demand? Literature Review The production of the Dreamliner was a departure from Boeings traditions (Peterson, 2011). Boeing chose to outsource a major percentage of the engineering and manufacturing of the Dreamliner. The intention was to reduce development cost from $10 billion to $6 billion and reduce development time from six to four years.
Having already filled the market with 747s, Boeing is looking to capitalize on the demand for direct flights and medium capacity requirements. Airbus on the other hand is producing the A380, an aircraft capable of carrying up to 800 people. Airbus is looking to replace the ever growing old Boeing 747s in the market with a higher capacity more fuel efficient plane. Its easy to compare the two aircrafts in terms of size and primary use. The A380 is a high capacity aircraft capable of transoceanic flights, while the 787 has relatively the same traveling distance, but a maximum passenger count of 280.
(Wal-Mart Corporate Website) Huge turnover, large customer base and returning customers show that Wal-Mart has been able to achieve this goal in its 50 years of existence. Wal-Mart sources material from third world countries at low price. Very efficient supply chain management and bargaining power has enabled Wal-Mart to sell goods at low price. Company is also pursuing vertical integration strategy to lower cost. Answer-2) Wal-Mart Stores had turnover of $446.95 billion and net income of $15.77 billion in financial year ending
Southwest Airlines – 2008 Case Study Executive Summary Millions of people fly everyday. Southwest airlines provide low-fare travel among 58 cities in the United States. Although the airline industry suffered greatly in the aftermath of September 11, Southwest was able to continue to hold strong. Southwest airline continues to maintain steady sales as much of the industry was affected by changes in laws/regulations and competition entering the market. In the following report there is a brief introduction to Southwest Airlines and their strategy and then what, if anything, they need to do or not do to remain at the top and competitive in the airline industry.
Part I The aim of this paper is to compare the management of operations in bmibaby and one of other video case organisation (Vue, Fuller’s Brewery or Elm Surgery) featured in the DVD that accompanies Block 2 Operations Management and to show what are the similarities and differences in the management of these operations. bmibaby was established in March 2002 and is now one of the UK's fastest growing low cost airlines operating more than 900 flights a week from four UK bases to 28 European destinations. By October 2007 bmibaby was operating a fleet of 22 aircrafts. bmibaby is hugely successful because it delivers simple service, simple products, great prices and great reliability. Vue was formed in May 2003 by the acquisition of Warner Village Cinemas by SBC International Cinemas.
As of June 30, 2010, SWA is the largest domestic U.S. carrier for passengers. It operates 547 Boeing 737’s to 73 destinations. Communicating a positive image to the public, while maintaining customer service and efficiency are the most important aspects in his vision. Kelley, an inspirational leader, also explains his rationale in decision-making plans. Kelly and other executives will lunch with new employees just to determine if the expectations are
JetBlue was named the number one U.S domestic airline by Coned Nast Traveler magazine’s Readers” Choice Awards” for the sixth year in a row. Furthermore, their product and services/extra amenities are excellent. There are leather seat and sleep kit, TV’s at each seat, additional leg room throughout all JetBlue aircraft. In an industry with many circulating question marks, JetBlue has used its strengths to produce a promising results and a successful company. Every coin has two sides.