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Air Nations Case Study

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Submitted By miimzz
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Introduction to HRM Assessment 2:
Air Nations Case Study

In 1998, Air National turned as a newly privatised company that faced the future with enthusiasm, confident that they competed in a deregulated industry. However, in April 2000, the tone changed because they had a pre tax loss of $93 million, and the newly appointed CEO announced a major change in the company business strategy that would influence to a transformation of business operations and human resources practices in the company.

1. In the middle of 1980s ANs external environment was privatised by Britain's conservative government, which exposed the company to competitive forces resulting in high competition and price wars in the market. They had to prepare for privatisation that required a painful restructuring because they needed to make the company attractive to initially sceptical investors. This gave the senior management the degree of stability to implement a new and HRM strategies. At the same time, there was a prolonged economic recession and the on going deregulation of civil aviation in Europe and America. With these negative forces, AN adopted a low cost competitive strategy and joined the industry wide price war. At this time, they were aggressive in the market place and they reduced costs in areas like service, marketing and advertising.

This low cost competitive strategy proven unsuccessful due to the fact that AN was unable to meet their customers needs because of the aggressive attitude and being too focused on the businesses procedures in reducing costs and forgetting the importance of their customers. The poor quality in customer service reflected on the businesses reputation evidentially causing the business more losses. Due to the critical state that AN was in, it realised that a clearer and more structures strategy was need and they worked on adding value to the business

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