...WHY CONTINENTAL: A $385 million loss for the final months of fiscal year 1994 signalled Continental might go bankrupt. Continental was in dire straits because the deregulation of the commercial airline industry in 1978 ushered in a new era focused on mergers and acquisitions and bitter employee-management relations. Venerable airline brands with a commitment to quality, like Continental, were prime takeover targets. After Texas Air Chairman Frank Lorenzo (HBS 1963) secured Continental in his hostile takeover bid, tensions escalated between Lorenzo and the old guard--especially when Lorenzo declared Continental bankrupt in the fall of 1983. In October 1994, five months after Continental exited its second bankruptcy, Bethune was elevated to CEO and created a Go Forward Plan to return Continental to profitability. Two years after unveiling the Go Forward Plan, Continental was at the top of the industry in a number of important performance metrics. KEY ISSUES: Continental ranked tenth out of the ten largest U.S. airlines in all key customer service areas as measured by the Department of Transportation: on-time arrivals, baggage handling, customer complaints, and involuntary denied boardings. The airline had already been in bankruptcy twice, and was headed for a third round as its cash dried up. STRATEGIES FOLLOWED FOR TURN AROUND: The turn-around plan — the Go Forward Plan 'A' — had four different elements each of which were given an inspirational title : ...
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...Managing IT for Business Continental Airlines: Outsourcing IT to Support Business Transformation Questions: 1. Why is it necessary to have top management support for the implementation of technology innovations? Innovation implementation require adequate resources including money, but more importantly, people and time. These resources will not be formed without top management support. Top management support is essential for the project since it is they who allocate the funds which turn the wheels of changes in the organization. At all stage of implementation, management must monitor and change the process if necessary (Mohini and Dianne, 2004). In the case of Continental Airlines, Janet Wejman who were the Chief Information Officer noted in the case which the management team treated the new technology as a progress continuity that Continental had made. In this case, the investment of $2.5 million on an email system, $2.8 billion outsourcing agreement and other investment will not been realized without the approval and support from the top management. 2. What do top managers need to know about IT in order to run their business? The dependency on information technology (IT) has increased progressively for organizations as a strategically important competitive advantage. If planned, developed, and managed properly, IT can bring about greater efficiency in organizational operations, better working environments, and effective decision-making processes. A...
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...case case Continental Airlines: One Company’s Flight to Success In the last decade, Continental Airlines has had a spotty track record. The airline twice filed for bankruptcy, realized diminished performance culminating in a $613 million loss in 1994, and was ranked dead last in industry indicators such as on-time performance among the major carriers. During these years, employees at Continental had undergone several series of layoffs and withstood both wage cuts and delayed wage increases in an effort to slash Continental’s costs. The result of these efforts was a demoralized workforce and a corporate reputation that put Continental near the top of Fortune’s list of “least admired” companies. Despite this history, things have taken a positive turn for the airline in recent years. Since the arrival of Gordon Bethune, Continental’s new CEO, the company appears to have made a 180-degree turn and is now a highly productive and profitable carrier. Indeed, all indications are that Continental is back on track. For instance, in 1995, the carrier was number 1 in on-time performance for the first time ever and was highly ranked in baggage handling. Customer complaints are down more than 60 percent, and Continental recently gained the distinction of being the number 1 airline in customer satisfaction among the major U.S. carriers for long-distance flights. Just a few years earlier, Continental was last in this category. Moreover, sick leave and on-the-job injuries have decreased...
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...Continental Airlines and United Airlines Merger Tony McDougal December 2, 2012 Professor Bates Abstract This paper explains the challenges faced by two major U.S. airlines, United and Continental airlines in an attempt to merge, and form the world's largest airline based in the United States. This consideration is based in relation to the movement of passengers via air traffic. The airline merge occurred in order for each airline to survive and be competitive within the airline industry. The paper explains briefly the reason for this merger, the strategy it used and went through to accomplish the merger. It also explains some pros and cons the merger and management faced. It explains the vision of the newly created company in reference to where they want to be in the future and the profit of revenue they foresee to earn with this merger. This paper outlines the structural change the new United Airlines came up with after the merger took place and how both United and Continental Airlines management, employees, and customers adapted to the merge. Continental Airlines and United Airlines Merger The merger of United and Continental airlines that was under way in 2008 formed the third’s world largest airline. This merge occurred during the decrease of air travel from heightened security measures against terrorism and high fuel costs. During this time, the United States government also tried to help by giving the airline industry monetary...
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...across the merger between United and Continental airlines. The reason that I choose to do the merger is because I knew that they were going to go through many changes within this merger. Both airline companies have a lot to offer to each other with this merger that they can compete with Delta airlines one of the largest airline in the world. This merger will bring about several changes within both companies. In this paper I will be providing the different changes between both companies with the merger including the culture, systems and unions. Since they were two different companies this will bring on big changes when they finally merger together. History In In the year of 2008 United Airlines CEO Glenn F. Tilton and Continental Airlines, CEO Jeffrey A. Smisek began to talk about merging both company together in order to become the largest merger ever to take place between two airlines. However, once Continental found out about United Airlines declining financial statues they declined their offer. The talk of United negotiating a merger with US Airways stunned the CEO and board members of Continental Airlines. Predictor stated that United Airlines used this tactic to allure Continent Airline to renegotiate the merger that was discussed in 2008. In 2010 a big announcement was presented stating that United and Continental airlines were merging together as one Airline Company. Major of the management team will consist of Continental executives. This merger is just another...
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... Real-Time Business Intelligence at Continental Airlines Real- time data warehousing works with Continental's strategies and plans through providing the best service possible to its customers. Continental had the goal of getting people to their destinations on time and with everything that they were traveling with. Real-time data warehousing helps to track the flight information, connection information, and passenger information in order for the company to be effective and for the passenger to have an enjoyable flight. With the fast paced environment of society and businesses today, the real-time data warehouse is the most efficient method of information travel for the company to use. At the click of a few keys, anyone with access is able to find information about connecting flights, passenger information and also problems that the passenger might run into with their flights. The real-time data warehousing was able to address the problems with airline reservations and connection people to other airlines for flight transfers, this makes things easier so the airline is able to see where each customer is going and the service that they need to provide to that customer to get them to their location on time with the least amount of glitches as possible. This feature also tracks passenger information such as all of their demographics and also tracks any disturbances that they might have had on a flight before so that the airline can work to avoid anything in the future...
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...tell first some more words for the history and success of Continental Airlines – a major U.S. airline headquartered in Huston, Texas * In 1934: “Varney Speed Lines” was founded.The beginnings of Continental Airlines started in 1934, when Walter Varney founded an airline company that he named Varney Speed Lines. . * 1937: After 3 years a young an entrepreneur Robert Six's bought 40% of the company for $90,000 $ That investment was used mainly to pay debts that Varney had accrued during the company's first three years. Robert Six led the company in changing its name from Varney Speed Lines to Continental Airlines, contending that the young airline would never be successful with a name like "Varney." Robert Six led the company in the years of the Second World War, After the war period, during the economy expansion in 60 and 70 years in US and retired after 45 years leading the company. We could say in a period of rapid Expansion. * 1982: Texas Air Corporation acquires Continental Airlines - Robert Six retired on 74 years and gave his confidence to Texas Air Chairman Frank Lorenzo to carry Continental Airlines back into profitability again. Actually Frank Lorenzo had the luck to buy 58% of the Continental Airlines because of the rejected bank withdraw to Continental for buying another airline company. * 1983: Continental files 1st bankruptcy - after 1 year after its the first time that an airline had attempted to continue operations while in bankruptcy. To...
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...Kevin Karasti The Demise of Eastern Airlines By 1985 Eastern Airlines had become one of the United States’ largest airlines. They operated in twenty-six countries on three different continents, and were considered one of the four prominent airlines in the U.S. Although for a time they were successful, it wasn’t long after that Eastern Airlines began to run into problems. Eventually Eastern made a decision that would prove to be disastrous for the airlines-- they sold the company to Frank Lorenzo. Why did Eastern sell to Texas Air? For starters, the 1970's and 80's proved to be a very difficult time for many airline companies. In the late 70’s the Airline Deregulation Act of 1978 was passed. The enactment did provide many new freedoms (freedom to expand their route systems for example), and positive outcomes for airline carriers. One of which was flexibility to develop innovative pricing structures. This flexibility allowed carriers to expand into new markets. Yet with the positive changes of deregulation, came negative consequences for the airlines-- “airfare wars.” Companies now had to compete to remain in the market. They waged airfare wars against their rivals, slashing their own prices to knock off smaller companies. Many airlines struggled tremendously, and had difficulty keeping their doors open. This made many air carriers susceptible to unwanted, hostile takeovers and mergers. In 1985 Eastern was a large airline (three point nine billion in assets, and...
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...Air Canada is Canada’s largest domestic and international full-service airline and the largest provider of scheduled passenger services in the domestic market, the transborder market and each of the Canada-Europe, Canada-Pacific, Canada-Caribbean/Central America and Canada-South America markets. Passenger transportation is the principal business of the Corporation and, in 2009, represented 87% of its total operating revenues. During 2009, Air Canada, together with Jazz, operated, on average, approximately 1,331 scheduled flights daily and carried almost 31 million passengers. In 2009, Air Canada and Jazz provided direct passenger air transportation to 156 destinations and, through commercial agreements with other unaffiliated regional airlines referred to as tier III carriers, to an additional 11 destinations, for a total of 167 direct destinations on five continents. The Corporation’s primary hubs are located in Toronto, Montreal, Vancouver and Calgary. Air Canada also operates an extensive global network in conjunction with its international partners. Air Canada is a founding member of the Star Alliance Network, the world’s largest airline alliance group. The Star Alliance Network includes 26 member airlines. Through its strategic and commercial arrangements with Star Alliance members, Air Canada is able to offer its customers access to approximately 1,077 destinations in 175 countries, as well as reciprocal participation in frequent flyer programs and use...
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...Keiah Vail Professor: Seitu Stephens COM/156 April 29, 2012 Research Paper: Airport Security Airport security includes the procedure of guarding public transportation by airplane, as well as the terminals from which passengers of aircraft arrive and depart. Airport security has drawn the attention of the American public for invasive pat-downs, body scans and various news reports on concerns from TSA on failures to catch contraband items. A lot of people often wonder what is the reason for pat downs and body scans. Pat-downs are used to resolve alarms at the checkpoint, including those triggered by metal detectors and units. Pat-downs are also used when a person chooses out of screening in order to detect potentially dangerous and prohibited items. Because pat-downs are specifically used to resolve alarms and prevent dangerous items from going on a plane, the vast majority of passengers will not receive a pat-down at the checkpoint. All passengers have important rights during a pat-down. You have the right to request the pat-down be conducted in a private room and you have the right to have the pat-down witnessed by a person of your choice. All pat-downs are only conducted by same-gender officers. The officer will explain the pat-down process before and during the pat-down. Instead of making everyone strip down, the TSA has organized a type of body scan screening machine that let passengers skip the undressing part. The machine “undresses” you by using either x-rays or millimeter...
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...If you have ever visited and/or lived in the state of Texas, you have seen signs posted all over stating “Don’t Mess with Texas”. These signs are posted to remind people not to drop their trash on the ground of our big state. Well even those who live here have to be reminded more than others, which brings me to a very serious problem that is starting to brew in my neighborhood. I have noticed a truck coming into my neighborhood throwing their unwanted items and garbage in the vacant lot adjacent to my house. This has caused an enormous amount of frustration, complaints, and a disgraceful smell in our neighborhood. I live in a small community where everyone knows everybody, and we love our community, so I take it personal when someone tries to de-beautify my city. I agree with Winnie Wong (2013) when she said “I love my community and I do not like to see it littered and dirty. We need to do our best to keep our community looking clean!” I along with a few other residents called for a meeting with the HOA, (Home Owners Association) and informed them of the vastly growing issue. As Winnie Wong states, (2013) “It is important to keep our neighborhood clean and green”. We discussed several options and came up with a list of things that we would do to deter those who would come in and disrespect our neighborhood. Our first thought in our plan of attack is to prepare flyers that would simply state “Please DO NOT dump your trash here”. “To learn of more information...
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...PREGUNTA 1 Describe la tecnología Active –DWH tal y como es aplicado en Continental. ¿La aplicación que hace Continental de active DWH o DWH en tiempo real es igual a como se suele describir este concepto? Para Continental, el concepto de “active DWH” (o DWH en tiempo real) en realidad significa DWH en “right time”, es decir: no es necesario que toda la información se procese y proporcione en tiempo real, sino que cada información sea entregada y esté disponible según las necesidades específicas a las que debe responder esa información. De esta forma, podemos tener que es necesario conocer entiempo real donde se encuentra un cliente VIP, pero la información necesaria para conocer cuántas veces fue necesario recurrir a un piloto externo, puede perfectamente informarse cada 24 horas Parece una definición muy próxima a la que hace la industria de este concepto, como podemos ver, por ejemplo, en este enlace: http://it.toolbox.com/wiki/index.php/Active_Data_Warehouse PREGUNTA 2 ¿Cómo se enmarca el DWH activo de Continental dentro de sus planes y estrategia? Los resultados que estaba dando Continental en métricas tales como puntualidad, entrega de equipajes, quejas de usuarios y overbooking estaban siendo negativos. Esto estaba impactando directamente en los resultados de la compañía, provocando incluso situaciones de bancarrota temporales y suspensiones de pagos. En 1994 la compañía empieza a ser dirigida por Gordon Bethune, que se marca cuatro áreas de mejora: * Entender...
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...We have a positive fundamental outlook for the airline industry. In 2009, the S&P Airlines Index increased 27.43%, versus a 29.03% rise for the S&P 500 The airline industry is highly cyclical, and the level of demand for air travel is correlated to the strength of the U.S. and global economies. According to the S&P, it is expected that an improving U.S. economy continues to drive improving air travel demand over the next few months beginning at the end of 2009. At the end of 2009, the reported traffic statistics at many major carriers showed improving demand and revenues . Therefore, it is reasonable that the U.S. airline industry could be undergoing the start of fundamental industry demand improvement. In addition, since the industry has already reduced capacity levels, it should be able to raise fares as passenger travel demand improves. Even though oil and jet fuel prices is up sharply from 52-week lows, they are still notably lower than in 2008 , which should ease cash usage throughout the group and allow good entry points into new fuel hedge positions, thereby offering protection if oil spikes again. According to S&P, the top 10 U.S. carriers lost about $5 billion in 2009, after a $4 billion loss in 2008, as the benefit of lower jet fuel costs was eroded by lower airfares and falling passenger levels. Results in 2008 were impacted by record high oil prices. Airlines have cut fares in response to weakening demand, but we think recent cuts to domestic and international...
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...losses would be encountered due to bad weather. Opportunities- this would be a great opportunity to expand business investments and generate more revenue. Threats- according to the airport design, the runways were placed where they would be intercepted by high wind shears. The stakeholders are the passengers and their interests are convenience and efficiency at the airport. Denver’s regional council of governments is also a stakeholder and they wanted to improve the airport services to handle more passengers and cargo. Not all airlines supported of the decision to build a new airport. Some airlines such as United and Continental objected to the idea. United was against the construction of the Front Range airport out of fear of the added cost burden. The baggage handling system was significant because it meant that baggage would be transferred between different gates in less than ten minutes. The DIA is a good strategic fit for Continental because the airline was struggling to survive in the industry and the DIA would help boost its ratings. The single greatest risk in the decision to build DIA is the bad weather during winter. Bad weather would slow construction, which would in turn affect flight plans, increase workers overtime pays, et cetera. United can issue tax-free municipal bonds by lowering their ratings on bonds. The rating agencies have a significant impact in the financing of the airport because had...
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...price leadership over its competitors in the airline industry. * To amend its pricing strategy to avoid massive losses. * To shun being the lowest rank out of fourteen major airline in its evaluation on time arrival. * To improve service and safety of the Texas Air Inc. III. SWOT analysis Strengths * Price leadership * Largest airline system * High number of established, high frequency discount rates Weaknesses * Poor service and safety * Ultra low-fares Opportunities * Growth and expansion * partnership Threats * Competition * Passengers complaints IV. Alternative Course s of Actions (ACAs) ACA1. Texas Air Inc. will now be increasing its price by 30%. Expect high quality service would be given to its consumers. ACA2. Set aside pricing philosophy Peanut and MaxSaver fares. V. Recommendation We decided to adapt ACA1 because this can be better strategic move for the Texas Air Inc. In this strategy, they can avoid passenger’s complaints such as late departures, canceled flights and dirty planes. We believe that they can give their passengers a high quality services. VI. Marketing Strategy Executive Summary: Early in 1987, Texas Air bought Eastern Airlines and the financially troubled People Express. Texas merged Continental, New York Air, and People Express into one full-service, low-fare airline under Continental banner, making the continental the third largest airline in the United States. They believe in giving...
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