The airline industry is one of the most important industries in modern society as it keeps the world connected. Two of the biggest firms in this market are Southwest Airlines and Delta Airlines. The industry is an example of an oligopoly as only a small number of firms sell their services in a market with high barriers to entry. These high barriers largely come from the capital required to purchase a jet, let alone hundreds of jets, and to operate them with pilots and a crew. In this market, both Southwest Airlines and Delta Airlines share significant market power, and the decisions one company makes impacts the other, they are highly interdependent.
Sunset Airlines used the growth strategy and we listened to our shareholders to give us an advantage. In the 4th quarter we decided to merge with a major carrier at our regional hub. This allowed us to list with larger carriers. Our team sacrificed some autonomy, but sales increased. This was an excellent opportunity for Sunset Airlines and assured the future of our airline.
WestJet was able to remain successful amidst stiff competition from other airlines, a factor that led to other airlines trying to mimic WestJet’s culture and operations. Close competitors trying to copy WestJet’s culture would threaten their market, but Beddoe made it clear that it was impossible for the other companies to adopt their culture. Beddoe explained that it was doubtful for a company with many employees to change the mentality of everyone. From Beddoe’s statements, it is evident that the companies would have recorded lower performances due to interruptions as the companies try to adopt a new culture. The leadership of such companies would require diverting scarce resources into the culture change program.
Airlines are constantly under pressure, due to unprecedented schedules, competition and flight planning. Everything must be on time to make a dollar at the end of the day, and American Airlines is no different. Since 1934, American Airlines has been owned by the AMR Corporation and headquarter in Dallas, Texas. The airlines competes with all airlines throughout North America, the Caribbean, Latin America, Europe, and the Pacific (NTSB, 1999).
The Industrial Gases industry has been pre-dominantly characterized with high market concentration ratio with only about 5 major players controlling more than 70% of the market. The number of players came down to four when Air Liquide acquired Airgas earlier in 2016. Now, Praxair and Linde are exploring possibilities to merge. If this merger is accomplished, it will further reduce the number of major players to three.
Their strategy has been to create an environment which customers can trust and can relax allowing them to enjoy the experience. Their major attributes to their success is due to their low-cost model and the company’s clear key business purpose and core values which allows them to consistently execute their business model (Advance Business Consulting, 2009). The organizations outlines a very clear business purpose which is to be the only short haul, low fare, high frequency, point-to-point carrier in America and they have proven to be very successful at that by putting a high emphasis on the type of cultural they cultivate. They have also created a strategy to focus their cultural instead of providing many of the frills other airlines offer. Although they are well known for their low cost, they are also known for their simple in-flight service and fuel hedging using only the Boeing 737 planes which has saved them millions of dollars in maintenance and operating fees.
United Airlines has been in business since the 1920’s and is one of largest airlines in the world. United operates out of nine airline hubs in the continental United States, Guam, and Japan. The company employs over 85,000 people and helps millions of customers travel annually. In 2012, United Airlines merged with Continental Airlines and surpassed Delta as the largest carrier.
Anheuser Busch (AB) has had a long history of mergers, acquisitions and dealing with antitrust laws due to their aggressive distribution techniques. AnheuserBusch was founded in St. Louis, Missouri in 1852 after Eberhard Anheuser bought a failing brewery from Bavarian immigrant George Schneider. Anheuser, however, had no experience in brewing and quickly formed what we now know as AnheuserBusch with his soninlaw Adolphus Busch(). As time progressed and AB grew in size, it was time for them to become an international distributor which is where InBev comes into the picture. InBev is the product of even more breweries merging together, however.
Delta airline was expanding its business into low-cost airline segment by launching new independent subsidiary by the name of Song. Song’s primary business model was to target women and the segment of business class people. In effect to reduce the cost, Song management decided to fly high load factor on the drag of 900 miles. Moreover, the company increased the number of
American is also one of the largest scheduled air freigth carriers
United Airlines, founded in Chicago, Illinois is one of the major airline companies in the world. If approved by the U.S. government, the merger with the Continental Airline would make United Airlines as the world’s biggest airline company. The new United Airlines would surpass Delta Airlines – currently the largest airline company in the world - in aircraft fleet, and passenger revenues. (United Airlines Press Release, 2010).
American Airlines in the year 1939 was listed on New York Stock Exchange. During the World War 2, half of the American Airlines fleet was converted to military planes. They began Family Fare Plan in 1948. The main purpose of this fare was to attract families, so that they could travel together at reduced rates. In early 1960’s American Airlines along with IBM, introduced SABRE (Semi Automated Business Research Environment).
Qatar Airways Qatar Airways are its aggressive growth plan backed by the state that includes the construction and development of the new Doha international airport, which will include the world's largest aircrafts' hangers to be used for maintenance of Qatar Airways. Singapore Airlines Success factors of Singapore Airlines are: young and efficient fleets, educated staff, top ranked travel gateway and its low cost airlines known as "Tiger Airways", plus it's a membership of star alliance airline networks American Airlines Success factors of American Airlines are: largest airline in the world in terms of the total passengers transported, highest number of aircrafts, first to launch the loyalty program "frequent flyers". PEST Analysis Political factors The airline industry is affected by political situations, namely wars and terrorism.
Looking at the respective case studies, SIA, EA and Lufthansa have shared similar challenges like striving for cost effectiveness and differentiation from competitors. Despite these similarities, SIA and EA seem to have survived throughout as an individual highly recognized brands while being involved in Star Alliance overshadows Lufthansa. As well, Lufthansa also operated with higher labor costs than low-cost players or emerging market competitors – years of union advocacy, pension fund obligations, and industry regulations forced these airlines to devote a larger share of revenues towards labor benefits. EA advantage mostly comes from government support and their self sufficient in fuel compared to the other two airlines. External factors like fuel prices or government factors may affect the airlines, but the root of sustaining competitive advantages still lies within the organization’s strategies and core values in order to gain
Economic issues arise in a massive merger like in the US Airways and American Airlines merger. The question that I will attempt to answer is whether or not the antitrust laws that were out in place by the US government were effective in avoiding a monopoly and gaining consumer welfare in the airline market. In January 2012 U.S. Airways Group expressed interest in merging with AMR Corporation. This merger would add 1.5 billion dollars in revenue, reduce competition in various cities and create one of the largest airlines in
