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Alabama Airline

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Submitted By AlyseHoo
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Case Study: Alabama Airlines
Alabama Airlines opened its door in 1995 as a commuter service with its headquarter s and only hub located in Birmingham. A product of airline deregulation, Alabama Air joined the growing number of successful short-haul, point to point airlines, including Lone Star, Comair Atlantic Southeast, SkyWest, and Business Express. Alabama Air was started and managed by two former pilots, David Douglas (who had been with the defunct Eastern Airlines) and Savas Ozatalay (formerly with Pan Am). It acquired a fleet of used prop-jet planes and the airport gates vacated by the downsizing of Delta Airlines. With business growing quickly, Douglas turned his attention to Alabama Air’s toll-free reservation system. Between midnight and 6 am, only one telephone reservation agent had been on duty. The time between incoming calls during this period is distributed as shown in Table 15.16. Douglas carefully observed and timed the agent and estimated that the time taken to process passenger inquires is distributed as shown in Table 15.7.
All customers calling Alabama Air go on hold and are served in the order of the call unless the reservation agent is available for immediate service. Douglas decided whether a second agent should be on duty to cope with customer demand. To maintain customer satisfaction, Alabama Air does not want customers to hold more than 3-4 minutes and also want to maintain “high” operator utilization. Further, the airline is planning a new TV ad campaign. As a result, it expects an increase in toll-free-line phone inquiries. Based on similar campaigns in the past, the incoming call distribution from midnight to 6 am is expected to be as shown in Table 15.18. (The same service time distribution will apply.)
Discussion questions:
1. What would you advise Alabama Air to do for the current reservation system based on the

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