...Environment: Delta Airlines Delta Air lines is not immune to the political and legal structures that exist both domestically and globally. There are many factors that affect the political and legal structures for Delta in their domestic environment of the United States and also in the global environment of Europe. Teresa Cederholm in her article on MarketRealist.com states “The airline industry is widely impacted by regulations and restrictions related to international trade, tax policy, and competition” (2014) She goes on to elaborate further on issues that impact the airline industry such as “war, terrorism, and the outbreak of diseases” (2014). All of these issues require the government to set in and set different rules for airlines on how they operate both at home and abroad. There have been many factors that have recently affected the political and legal environment for Delta Airlines. One of the biggest events of our generation that affected the airline industry was the terrorist attacks of September 11th. After September 11th, the United States government many security regulations in place to make air travel safer for both the passengers and the crew of the air plane. With many of the restrictions in place, Delta Air Lines faced many problems financially. According to Cederholm, the revenue for all the United States airlines dropped to $107.1 billion in 2002 from the $130.2 billion in 2000 (2014). Cederholm goes on to state that “the global airline industry recorded losses...
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...Chapter 2: How Airline Markets Work...Or Do They? Regulatory Reform in the Airline Industry Severin Borenstein and Nancy L. Rose October 2008 Severin Borenstein is E.T. Grether Professor of Business Administration and Public Policy at the Haas School of Business, U.C. Berkeley (www.haas.berkeley.edu), Director of the University of California Energy Institute (www.ucei.org), and a Research Associate of the National Bureau of Economic Research (www.nber.org). Address: Haas School of Business, University of California, Berkeley, CA 94720-1900. Email: borenste@haas.berkeley.edu. Nancy Rose is Professor of Economics at the Massachusetts Institute of Technology (econwww.mit.edu) and a Research Associate of the National Bureau of Economic Research. Address: MIT Department of Economics, E52-280b, 50 Memorial Drive, Cambridge MA 02142-1347. Email: nrose@mit.edu. Nancy Rose gratefully acknowledges fellowship support from the John Simon Guggenheim Memorial Foundation and MIT. We thank Andrea Martens, Jen-Jen L’ao, Yao Lu and Michael Bryant for research assistance on this project. For helpful comments and discussions, we thank Jim Dana, Joe Farrell, Michael Levine, Steven Berry, participants in the NBER conference on regulatory reform, September 2005, and seminars at University of Toronto, Northwestern University, University of Michigan, UC Berkeley, and UC Davis. This paper is forthcoming as Chapter 2 of Economic Regulation and Its Reform: What Have We Learned?, N.L....
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...Company Analysis Project – Final Paper – Southwest Airlines Charles M Mohr MBA 6008 – Global Economic Environment Capella University Doctor Halstead February 19, 2016 Abstract The aircraft carrier business contends in an oligopoly showcase. This implies just a few of airline companies control the significant bit of the business. Southwest Airlines is one of these organizations. They make up 16.6% of the business sector, second only to Delta. The motivation behind this paper is to talk about the microeconomic and macroeconomic situations that Southwest Airlines faces every day. The Airline Deregulation Act that was passed in 1978 was a huge impact on the aviation industry. There are administrative contemplations on financial choices, for example, group clamor and air quality. Southwest Airlines has moral (ethical) contemplations that should be tended to at whatever time financial choices are made. This paper additionally touches on the monetary hypotheses and models, including the Bertrand Model that Southwest Airlines ought to audit and consider for future accomplishment of the organization. Southwest Airlines must take after the Sustainability Accounting Standard for Airlines for all their bookkeeping purposes. Table of Contents Abstract 2 Microeconomic Environment 5 Macroeconomic Environment 8 Economic Implications 10 Regulatory Considerations on Economic Decisions 11 Ethical Considerations on Economic Decisions 13 Economic Theories and Models 14 ...
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...strategic plan. To conduct an environmental scan external and internal information should be evaluated. A SWOT analysis will focus on the strengths, weaknesses, threats, and opportunities. We will discuss the most signification environmental threats for Southwest Airlines. There are many environmental factors that could influence the performance of the company, Southwest Airlines, which provides low-cost air travel and service. This student will discuss two environmental threats pertaining to Southwest Airlines. Two environmental factors that have a major impact on how businesses operate are: economic factors and regulations. September 11, 2001 terrorist attack on the World Trade Center was a moment in history that effected Nation and the U.S. economy. Most importantly the airline industry was threatened by the aftermath of the economy. “The events of September 11 have had some of their worst economic effects on the airline industry, leading to a dramatic fall-off in passenger demand and substantially higher costs” (Gowrisankaran, 2002). After the attack in 2001 the Transportation Security Administration (TSA) within the Department of Homeland Security were given the safety and security regulation responsibilities (Smith Jr. & Cox, 2008)....
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...Alaska Airlines Strategic Management Model Linda Gay Cahill Table of Contents: Strategic Profile Company Introduction 3 Strategic Analysis PEST Analysis (Political, economic, social & technological factors) 4 Resource-Based View 6 Value Chain Analysis 8 SWOT Analysis 11 Strategy recommendations 13 References 14 Company Introduction Alaska Airlines is the ninth–largest U.S. airline based on passenger traffic and is the dominant U.S. West Coast air carrier. Headquarter in Seattle, Washington, Alaska carriers more passengers between the state of Alaska and the Lower 48 than any other airline. During recent years it has expanded significantly to serve more U.S. East Coast, Mexican and Canadian destinations. Long know for its Alaskan roots, symbolized by the Eskimo painted on the tail of the aircraft, Alaska Airlines offers a friendly and relaxed style of service, one that passengers have came to appreciate as the “Alaska Spirit.” The airline is known for embracing innovative technology to improve the customer experience. The carrier traces its roots back to 1932, when Linious “Mac” McGee airways started flying his three-seat Stinson between Anchorage and Bristol Bay, Alaska. A merger with Star air service in 1934 created the largest airline in Alaska, which eventually became Alaska Airlines. Alaska and its sister carrier, Horizon, are owned by Alaska Air Group.1 Alaska Airlines has a dominant market share serving Alaska. Unlike the rest of the economy...
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...CASE: Connecting within Oneworld Following 2010 approval by U.S. and Japanese authorities for antitrust immunity, American Airlines (AA) and Japan Airlines (JAL) began sharing routes in 2011 that connect mainland North America with East Asia through a nonequity joint venture. Flights between Honolulu and Japan are not included in the agreement. This joint venture is similar to one forged among AA, British Airways, and Iberia for trans-Atlantic travel that began operating in 2010. In both cases, the agreements allow representatives from each airline to jointly manage capacity, sell and promote space on flights operated by each other, divide revenues, and schedule connecting flights. The major thrusts for these ventures are to cut operating costs by better controlling capacity, avoid disruptive price competition among them, and schedule so that there are more and better departure times and connections for passengers. The proposals are merely extensions to a historical series of alliances linking international airlines. In fact, the airline industry is unique in that its need to form collaborative arrangements has been important almost from the start of international air travel because of regulatory, cost, and competitive factors. In recent years, this need has accelerated because of airlines’ difficult profit performance. In effect, the airlines have been squeezed. First, costs have been rising, particularly because of oil prices and the requirement for greater...
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...Mod 7 * ------------------------------------------------- Question 13.6 out of 3.6 points | | | Prior to 1946, the airports of this country were financedAnswer | | | | | Selected Answer: | by state, county, or municipal governments. | | | | | Question 23.6 out of 3.6 points | | | Which of the following statements concerning the Federal Airport Act of 1946 is not correct?Answer | | | | | Selected Answer: | Smaller cities greatly benefited from the federal financial support. | | | | | Question 33.6 out of 3.6 points | | | The Airport and Airway Revenue Act of 1970Answer | | | | | Selected Answer: | imposed taxes on all users of the airport and airway system. | | | | | Question 43.6 out of 3.6 points | | | Under the Airport and Airway Development Act of 1982, theAnswer | | | | | Selected Answer: | All of the above | | | | | Question 53.6 out of 3.6 points | | | The National Transportation Safety Board (NTSB) was created by theAnswer | | | | | Selected Answer: | Department of Transportation Act. | | | | | Question 63.6 out of 3.6 points | | | Which of the following was not a reason for passage of the act creating the Department of Transportation?Answer | | | | | Selected Answer: | To promote the development of civil aeronautics. | | | | | Question 73.6 out of 3.6 points | | | The NTSB is charged with all of the following...
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...MGT 4315*2 Team 4 Strategic Profile and Case Analysis Purpose In the airline industry competitors have to work hard to maintain market share and even more to increase their share. Southwest Airlines has become the market share leader in terms of passengers carried with the simple strategy: “low-cost/low-price/no-frills.” They have done an excellent job in implementing and executing their strategy elements. Some of the most crucial executions in the Southwest strategy are their point-to-point scheduling of flights, customer service and customer satisfaction, and appreciation of employee involvement for continuous company improvement. Although many other airlines can implement the same strategic elements as Southwest has, they would still be behind the times since Southwest has been working efficiently from inception. Throughout this analysis of their performance, one may conform his or her own opinion on how to grade Southwest with the information provided. Alternative strategic suggestions will be evaluated with a preferred alternative choice that could improve the Southwest image and performance. Situation Analysis General Environmental Analysis Until the Airline Deregulation Act of 1978, the government had control over airline fares, routes, and market entry. But since Southwest's initial plan was to fly only intrastate routes, they did not have to come under the regulation of the Civil Aeronautics Board. Southwest did, however, encounter some legal...
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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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...companies emerged. By 2002, traditional GDS operators competed with each other as well as with airline websites, some Web-based travel agencies and a new entrant called Orbitz, an online travel agency owned by a group of airlines. In 1996, less than one percent of airline tickets were sold online. By 2001, 20 percent of airline flights in the United States were booked online, and the percentage was expected to grow to 25 percent by 2004. Seemingly overnight, forty years of comparative stasis in the business models governing airline reservation and ticket distribution turned into a dogfight as airlines, brick and mortar travel agents, online travel agents and GDS operators clashed over the approximately $180 billion market for airline travel. With ticket distribution costs comprising the third largest expense at some airlines, the battle promised to be fierce. The rapidly growing tourism sector in China has provided a good market environment for tourism enterprises, including travel agencies. In the five years through 2012, revenue for the Travel Agencies industry in China has increased at an annualized rate of 11.3% to $47.5 billion. With increasing demand for diversified tourism products such as luxury and high quality products, travel agencies have been developing new tourism products in order to meet the needs of the consumers. Revenue from the top four firms in the Travel Agencies industry in China – CITS Group Corporation, China CYTS Tours Holding, China Comfort Travel Group...
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...Issue/Decision Despite its industry-leading position, Southwest Airlines was facing new challenges in mid-2008 which threatened its annual growth potential. Historically, Southwest’s seat availability grew at a rate of 5-10% each year; however, 2008’s projected growth was limited to 3% year-over-year. This is a direct result of strengthened competition which weakened Southwest’s competitive advantage, the onset of an economic recession, a high fixed cost structure with high operating costs—particularly fuel which consumed 31% of the total operating costs—and overall market saturation. Strategic Framework Southwest Airlines was built with a strong cost-leadership strategy, focusing on domestic, short-haul (under 500 miles), point-to-point flights (not “hub-and-spoke” network like competitors), using only one type of aircraft and offering a “no frills” approach to service. Its operating efficiencies enable high frequency flights with quick turnaround times. Like all airlines, Southwest faced challenges with the market environmental factors. The industry is notorious for its high fixed-cost structure. With 80% of operating costs fixed, there are limited cost reduction opportunities, which make it low profit-potential industry. The airline industry was faced with pressures of customer dissatisfaction with airline services, increasing costs for aircraft safety maintenance, debt servicing, increased air-traffic delays, financial pressures encouraging mergers, and increased...
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...January 9, 2012 Discus the trends in the U.S. airline industry and how these trends might impact a company’s strategy. Change is the only thing that is constant. The airline industry has been through many changes in the past ten years. The September 11 event of 2001 sparked many changes. Security has been strictly enforced and fuel prices are at an all-time high. Many air-line companies have implemented baggage fees to help recover from the rising fuel prices and etc. There are some recent trends that have helped the air-line industry and also affected the air-line industry. With booming cellular data usage on the rise, many companies have turned to mobile apps. Smart phone applications are convenient for customers and the companies are taking advantage of the availability of these mobile devices. It is instant access and information in the palms of their hands. Airlines are increasing their reliance on technology to streamline passenger experience at check in and at the gate. Despite unfounded security concerns, paperless boarding passes have been adopted by some airlines and are being tested by others. A bar code is sent to the phone and then scanned by a barcode reader at security and during boarding. The TSA actually prefers the electronic bar codes, because they are much harder to counterfeit than printable boarding passes. One of the most recent trends that will impact the air-line industry is the European emissions regulations. Everyone in the world is preparing for European...
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...impact on the sectors of the world economy more so the airline sector, with this in mind the term paper focused on the impact of changes in the international business environment on the airline industry. International business environment is viewed as the most contexts for international business and comprehending how forces in this environment impact the business operations is the difference between business failure and success. To this end, the research established various changes in the business environment that have taken place in political, economic, financial and socio-cultural circles. Political changes especially the Arab spring have had far reaching impact on the airline sector with fall in passenger numbers to these destination as well as the rise in fuel prices negatively impacting the growth of the industry, political instability in other areas as well as laws regulating the airline sector have been on the rise as countries seek to protect local airlines, the economic crisis slowed down the growth of the sector but with the recovery process on track, the airline industry is expected to grow into the foreseeable future, issues such a new taxes for example carbon tax in Europe, the unstable foreign exchange market and inflationary pressures continue to impact the industry growth. Financial changes after the 2008 financial crisis have also affected the sector with stringent borrowing terms imposed as well as regulation on remuneration and benefits schemes for top managers...
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...Analysis Maintenance repair and overhaul is an industry associated with fixing, maintaining and modifying aircrafts and helicopters should they be any defects, scheduled or unscheduled maintenance. It can also be defined as the procedures which main objective is to restore an item to the condition which it can perform its required purpose. The procedures combine technical, managerial and directing of the process. MROs are engaged in providing aircraft, engines and helicopter associated services like maintenance, repair and providing engines, electrical components, instruments and accessories for aircrafts and helicopters while being on par with aviation regulatory agency policies. They also supply spare parts, chemicals, raw material and consumables for aircraft production and manufacturing. MROs also provide and calibrate testing equipment (including pneumatic and hydraulic test benches) which are used for aircrafts and also maintenance tools and aerospace ground support equipment. They also carry out ferry flying (test flights) and ground support operations aiding aircraft taxiing and organizing passengers movement. Maintenance repair and overhaul companies also provide training services and consultancy in areas such as aircraft type rating, quality development , corrosion control and engine mapping.(1) (2) The research conducted on the economical side of this industry reveals that over the past 5 years, MRO industry steadily climbed out of the recession. Following...
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...Song Llc Airlines Esequiel Garcia Dr. David Lowe ASCI 254 Monday, July 30, 2012 Table of Contents Abstract ………………………………………………………………………………………...…3 History of Huff Daland Duster Company………………………………………………...……….4 Collett Everman Woolman………………………………………………………………..………4 Air Mail Contract.....................................................................................................................…...4 Peruvian Airways merger with Pan American Grace Airways…………………………..……….4 Delta Air Service first passenger flight………………………………………………………..….5 The Air Mail Act of 1934……………………………………………………………..…………..5 The Civil Aeronautics Board (CAB) determine routes………………………………..………….5 The Airline Deregulation Act of 1978……………………………………………………..……..6 Song Airlines…………………………………………………………………………………..….8 Song Airlines Aircraft fleet………………………………………………………………………..9 Song Airlines Marketing Strategy…………………………………………………………...…..10 Delta Airlines Bankrupt……………………………………………………………………..…...13 Delta Airlines Disband Song Airlines…………………………………………………………....13 Delta Airlines merges Song Airlines fleet with Delta……………………………………..….....14 Conclusion of Song Airlines…………………………………………………………………..…15 Figure 1-A Delta SWOT Analysis…………………………………………………………....…16 Figure 2-A Song SWOT Analysis…………………………………………………………….....17 References……………………………………………………………………………….………18 Abstract In the competitive business environment it is imperative for any organization to ensure that its knowledge of the industry in which...
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