Boeing and Airbus dominate the aircraft manufacturing industry. They provide their aircraft to majority of airline companies, so they have the power to set the price. On the other hand, the fuel price is decided by the market, so majority pay fuel with a market price. The bargaining power of buyer is high. 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.
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
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.
Besides, one of the stakeholder-rich environments is airports. BAA is a large company who privately operate a number of UK airports, including London Heathrow Airport. Their mission statement is to achieve improvements in the profitability rapidly and to maximize the profit. There are several stakeholders of BAA; they can be divided into internal and external. Airlines, logistics companies, the employees and the customers are those internal stakeholders.
Firstly, market analysts began by talking directly with major airlines to get their estimates of future needs and then they combined this information with econometric models to generate forecasts. Segments we defined by range of travel and all forecasts were based on the following assumptions: continued regulation of the airline industry; continued airline preferences for routes that directly linked pairs of major cities; steadily rising fuel prices and no new competition from other airframe manufacturers in the medium range market. Configurations include the choice of engines, wings and tail. The process of configuration is complex and repeatedly. The configuration changes constantly due to the requirement s of customers.
Exploitable- JetBlue could design the interior of the aircraft to improve passenger comfort and use E190 as an useful tool to expand market and attract new customers. Implication: The E190 provided a unique opportunity for the growth of JetBlue. However, this plane did not completely match the company’s current capabilities and costed a lot. Thus the CEO of Jetblue must change their strategic strategy to either keep E190 as a VRINE resource or sell it. Capability 1: High level of service (Bill of Rights) Valuable-
United Airlines On the surface the Wall Street Journal (WSJ) report sounds very impressive. As if the homework done and the facts and figures provided show they know more about the airline and their business than possibly the airline itself knows. I think the WSJ may have a few good points about the cost of the flights from San Francisco to Washington, D.C. But they can not possibly know everything that goes into how and why and airline provides flights to certain segment of customers. For an airline to simply apply a percentage or portion of the costs of airport fees, baggage handlers, ticket agents and building charges to each flight to cover the costs of sunk or overhead costs would most likely eliminate 60 to 70 percent of the flights they provide.
These intellectual property laws are recognized for major contributions to society and the economy. Recently intellectual properties have been credited with the majority of companies’ success, therefore catapulting intellectual properties to the forefront of our social and economic interest. Southwest Airline owns the rights to certain intellectual properties that allow it to stand out among its competition. If a company, especially one in such a highly competitive industry, does not have exclusive rights to certain aspects of its operation than it is extremely difficult to compete. The airline industry seems to be one those that it is very difficult to obtain intellectual properties, especially when dealing
(Hint: Focus on pages 17-23 of the 10-K/A.) Jet blue has some unique risks but some that are consistent in all business models. When shareholders expectations are valued, especially in a competitive market such as airlines, they must remain focused on these risks. In the airline industry fuel costs are at an extreme. At some point the conversion from low fares to semi variable costs such as fuel will need to mesh.
customer satisfaction, improved on-time rating, lower fees, standardized pricing and, most importantly, safety. Chris Edwards states, “Any service that can be supported by consumer fees can be privatized. A big advantage of privatized airports, air traffic control, highways, and other activities is that private companies can freely tap debt and equity markets for capital expansion to meet rising demand. By contrast, modernization of government infrastructure is subject to the politics and uncertainties of government budgeting processes. As a consequence, government infrastructure is often old, congested, and poorly maintained” (Edwards, 2009).