High cost of entry into industry Potential Competitors: Low - Rivalry among existing firms is intense, which affect the profits to be low. It¡¦s unattractive to the potential competitors. - High initial investments and fixed costs such as lease a fleet of safe and reliable aircraft, negotiate reasonable gate access and landing fees as well as high labor and fuel costs. - There are the price competitions in the airline industry, which some major airlines offer the low-price fares that is very difficult for new entrants to gain enough profit to cover the investment and fix cost in this industry. Rivalry among Existing Firms: High - Currently, there are many major airlines such as Delta, United and American that exist in the same market as Jet Blue.
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.
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.
WestJet Vacations scored higher than the other vacation companies for overall satisfaction, likelihood to recommend and customer service. Canadian travel agents have also voted the WestJet Vacations website the best among approximately 20 tour operators. WestJet continues to grow its airline partnerships and currently has 27 alliance relationships with airlines around the globe. These partnerships bring additional guest traffic to the airline and have also made it easier for WestJet guests to reach an expanded network. So for now, Westjet is one of the leading airlines in Canada and is among top six airlines over the
Not to mention, the startup of some discount airlines such as Southwest has hurt the major airline companies even more. There are numerous strong competitors that offer similar services, with many using the same routes as Southwest. There are approximately 28,000 commercial air flights every day, keeping the airline travel market very saturated. With the high number of flights and number of routes
Emissions from these aircraft are 30 per cent lower on a per person basis than the fleet of 200-series aircraft WestJet replaced. WestJet currently has one of the youngest and most fuel-efficient fleets in North America with most aircraft equipped with blended winglets, which significantly reduce fuel burn and emissions. WestJet is the world-wide leader and the first carrier in Canada to adopt Required Navigation Performance (RNP) approach technology to land aircraft. RNP utilizes Global Positioning System satellites to allow aircraft to fly direct and precise approaches to airports. This shortens flight time and miles flown, also reducing fuel burn and emissions.
Easy jet is the largest air line in terms of passengers volume – ‘59 million’ (Easy Jet corporate media file, p.3) in UK and internationally across 30 countries with flight scheduled services of ‘600 routes’ as well as the fourth largest short-haul carrier in Europe with a market share of ‘8%’ (Easy jet annual report, 2012, p.12). In order to promote efficient service to customers, they introduce speed boarding that gives passenger’s greater choice over their seat arrangements. Furthermore, the volumes of passenger’s turnover have increased their financial performance to ‘£317 million’ (p.9) profit before tax and after tax of ‘£255 million’ (p.19). Their annual report can be assess at http://2012annualreport.easyjet.com/downloads/PDFs/Full_Annual_Report_2012.pdf and http://corporate.easyjet.com/~/media/Files/E/Easyjet-Plc-V2/pdf/content/press-info-kit.pdf a. Table: The vocabulary of strategy in Easy jet airline (2012 annual report) Term Definition Example (including why chosen and evidence Mission Overriding purpose in line with values or expectations of stakeholders Their mission statement is to ‘leverage cost advantage, leading market position, and brand to deliver point-to-point low fares with operational
Southwest clearly defines its existing purposes, which is to provide the lowest fares for business and leisure travelers traveling between states. Instead of competing with large-scale airlines to fly international routes, Southwest focuses on “point-to-point” interstate short trips, and more on maximizing the profitability than focusing on market share. This strong vision outweighs the allurement of international flight market, keeping Southwest airline concentrated on its own niche to gain profit. B. Cost-consciousness Since low fares have become its selling point, decreasing the cost becomes very important. Southwest Airlines tries to save money by simplifying its operating process.
7 P’S and STRATEGIES OF SOUTHWESTERN AIRLINES PRASHANT CHATURVEDI ROLL NO.80303120009 SOUTHWEST AIRLINES INTRODUCTIONSouthwest Airlines Co. , operating as Southwest Airlines, is the largest low-cost carrier in the United States and is headquartered in Dallas, Texas. The airline was established in 1967, adopting its current name in 1971. It is the largest airline in the United States based upon domestic passengers carried as of June 5, 2011. Southwest has more than 46,000 employees as of August 2012 and operates more than 3,400 flights per day. As of August 2012, Southwest Airlines operates scheduled service to 77 destinations in 40 states.
The A380 made its first commercial flight in 2007. Capable of flying over 8000 nautical miles without refuelling, the A380 would be ideal for long-haul passengers and freight applications. By 2009, A380 production was several years behind its contracted delivery schedule and some airlines cancelled their orders. The survival and future success of Airbus, including the employment of 52,000 people at 16 sites in France, Germany, UK and Spain, depended critically on A380 meeting its sales targets over the medium and longer term. Airbus and Boeing focus on medium and long-haul jet aircraft with 100+ seats.