...The Commercial Airline Industry | | The Commercial Airline Industry There are many inventions and advancements that have changed the way mankind lives, communicates, and functions, but few have established a fundamental turning point that has added new breadth to the way we live like the airplane did. Airplanes have allowed us to see and visit parts of the world we would have never dreamed existed. It has also been a key factor to defeating our enemies and protecting our allies overseas in wars. Now it has become a part of our day to day activities and it would difficult to picture our lives without it. The commercial airline industry is a growing industry. “In the past decade, air travel has grown by 7% per year…Scheduled airlines carried over 1.5 billion passengers last year alone”, (Stanford/Airline Industry) and because of globalization this number is just going to rise. Threat of New Entrants (High) One of the major barriers to entry in the Commercial Airline Industry is the high cost of capital. The immense amount of money it takes to enter this industry is not enticing especially with an average gross profit margin of around 3-5% across the industry. Another risk to be considered when entering this industry is the unpredictability of weather. Take Iceland’s Volcano eruption in April 2010 for instance; the volcanic ash left airlines motionless in the EU costing them $200 Million a day. When planning on entering this market it is vital to have a good cash cushion...
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...One of the world’s most competitive and prominent industries is the airlines industry. It generates huge amounts of income as well as employment each year. Some of the common names in US air travel service providers are Alaska, Northwest, Southwest, US airways, American etc. According to the latest statistics given by the International Air Transport Association (IATA), the airline sector will post a profit of $9 billion in 2011. After the recent credit crunch, economies are now coming back to normal, business travel is increasing and investments in the airlines are now rising. Political/Legal influences Privatization Over the years airlines have undergone large-scale privatization; previously a significant portion of airlines industry was government-owned. Privatizing the industry has led to drastic increase in the number of air service providers and the airline travellers. Legal provision Civil Aeronautics Board (CAB) was established to control the activities of the commercial Airline industry; it used to set the rates and even the mergers in the industry till the first forty years after its establishment. Then Airline Deregulation Act 1978 was adopted to make the industry more efficient and privately owned. This act removed the powers of CAB, subsequently CAB was wound up in 1984. This act still gives the authority of regulating air safety to government through Federal Aviation Administration. All airlines need to have 2 certificates: 1. Fitness certificate (issued...
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...Boeing |1 Boeing Strategic Analysis Report Professor Jiang Bus 189 Matt Fong Karolyn Vong Kenneth Wong Vivian Li Jae Woo Chae Joseph Eslao Boeing |2 Assessing the Industry Each year the strong economic growth of the U.S. has led to sustained high oil and fuel prices. Between 2003 and 2007, jet fuel expenses have increased dramatically by 15 percent to more than 30 percent of operating cost. Because of this, many airlines are demanding new aircraft that are fuel efficiency in order to help reduce their operational costs. The current trend of increasing fuel prices plays a key role in increasing the current demand for new aircraft or commercial airplanes that are more fuel-efficient. In addition, the rising fuel prices have taken a big effect on the economy. As fuel prices affect consumer goods and spending, leisure travel is expected to decrease, thus affecting the airline industry's bottom line. Furthermore, since the economy has gradually moved into a recession from the effects of rising fuel prices, many airlines that are struggling to stay out of bankruptcy, are looking for more ways to become cost effective. Thus, further fueling the demand for new commercial aircrafts to become more fuelefficient (2007 Annual Report). In order to save on costs so that Boeing can provide lower prices to its customers, Boeing and its competitor, Airbus, have both turned to outsourcing. Outsourcing has allowed Boeing to become more competitive. Furthermore...
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...Boeing |1 Boeing Strategic Analysis Report Professor Jiang Bus 189 Matt Fong Karolyn Vong Kenneth Wong Vivian Li Jae Woo Chae Joseph Eslao Boeing |2 Assessing the Industry Each year the strong economic growth of the U.S. has led to sustained high oil and fuel prices. Between 2003 and 2007, jet fuel expenses have increased dramatically by 15 percent to more than 30 percent of operating cost. Because of this, many airlines are demanding new aircraft that are fuel efficiency in order to help reduce their operational costs. The current trend of increasing fuel prices plays a key role in increasing the current demand for new aircraft or commercial airplanes that are more fuel-efficient. In addition, the rising fuel prices have taken a big effect on the economy. As fuel prices affect consumer goods and spending, leisure travel is expected to decrease, thus affecting the airline industry's bottom line. Furthermore, since the economy has gradually moved into a recession from the effects of rising fuel prices, many airlines that are struggling to stay out of bankruptcy, are looking for more ways to become cost effective. Thus, further fueling the demand for new commercial aircrafts to become more fuelefficient (2007 Annual Report). In order to save on costs so that Boeing can provide lower prices to its customers, Boeing and its competitor, Airbus, have both turned to outsourcing. Outsourcing has allowed Boeing to become more competitive. Furthermore, the option of outsourcing...
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...Boeing Company Prepared by Ivo Ivanov, group 1323 Fac. number: 12114158 I. Introduction In March 1910, William E. Boeing bought Heath's shipyard in Seattle on the Duwamish River, which later became his first airplane factory. Nowadays Boeing is the world's largest aerospace company and the leading manufacturer of commercial jetliners and military aircraft combined. Additionally, Boeing designs and manufactures rotorcraft, electronic and defense systems, missiles, satellites, launch vehicles and advanced information and communication systems. As a major service provider to NASA, Boeing is the prime contractor for the International Space Station. The company also provides numerous military and commercial airline support services. Boeing provides products and support services to customers I 150 countries and is one of the largest U.S. exporters in terms of sales. II . Company overview 1. Vision People working together as one global company for aerospace leadership Boeing- The future of flight. . 2. Mission To be the number one aerospace company in the world and among the premier industrial concerns in terms of quality, profitability and growth 3. Objectives * Continuous improvements in quality of products and processes: Boeing commitment to steady, long-term improvement in their products and processes is the cornerstone of their business strategy. * A highly skilled and motivated workforce – The most important resource is human resource:...
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...opened many questions regarding airlines, businesses, and risks international for the aviation world. The commercial airline left Schiphol Amsterdam airport and was traveling to Kuala Lumpur when it was shot down by Donetsk Ukraine. The area where the plane was shot down is under pro Russian rebel activity, as we know it today. The rebels used a Buk missile to shoot the plane down mistaken it for another type of aircraft. The type of missile used does not hit the plane yet it detonates before sending shrapnel, which ultimately blew the plane out of the sky sending it into pieces and bodies to the ground. The area where the jet crashed later was known to have a no fly zone in place, that was up to 32,000 ft. yet the plane was flying at 33,000 ft., which makes it acceptable. Certain areas of the world are under a no fly zone due to wars, conflicts, and the possibility of what has happened. ICAO and IATA provide the aviation authorities and the FAA with areas that are safe to fly and to continue to fly. ICAO is the International Civil Aviation Organization while IATA is the International Air Transport Association. The ICAO is a UN specialized agency, created in 1944 to develop international standards and recommended practices. The IATA is the trade association, which is in place to support many areas of aviation activity and help formulate industry policy on critical aviation issues. In a CNN interview by the Richard Quest to the Malaysia’s Commercial Director Hugh Dunleavy, Mr. Dunleavy...
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...: The case traces the history of Boeing, one of the two makers of commercial aircraft. At last in the year 2006 Boeing have recovered from its multi year setback in its competitive position with its competitor Airbus industries in the commercial aircraft industry. From mid 1990 Boeing had been losing in aircraft order and profit. Airbus booked more order than Boeing in its history in the year 1999 and repeated regularly until 2005. In the first half of 2006, Boeing booked 4 times more aircraft than Airbus. In 2005 Airbus repeatedly delayed in the delivery of its newest model A380, causing embarrassment, customer had also panned Airbus smallest model A350 at the drawing board stage and requiring rework on the model. Boeing two engine long haul 787 Dreamliner, a direct competitor to A380 and A350, had received rave reviews for its technological excellence, backed by firm orders from commercial airlines and aircraft leasing companies. Commercial airlines are the customer of Boeing and Airbus, had collectively losing in the early 2000. Some times the concern people were thinking of Boeing. Did the Boeing learn its lesson and the current good fortunes reflect in the long run. Could they able to ride on Airbus due to their missteps and misfortune? Boeing showing its excellence in design, solid order book position and their efficiency and production increased. The Company is almost synonymous with commercial air travel, due to the worldwide acceptance of its product. One of...
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...Conglomerates[edit] AKD Group Al-Karam Group of Companies Atlas Group Attock Group of Companies Bahria Town Chenab Group Cowasjee Group Dawood Group Dewan Mushtaq Group Fauji Foundation Fecto Group of Industries Ghani Group of Companies Gul Ahmed Group Habib Group Hashoo Group Izhar Group Jahangir Siddiqui Group Lakson Group Muller & Phipps Pakistan Nagina Group Saigol Group Servis Industries Limited or Servis Group Sharif Group Consumer goods[edit] Automobiles & parts[edit] Adam Motor Company, defunct automotive Al-Ghazi Tractors, tractors Atlas Honda, automotive Dewan Farooque Motors, automotive Ghandhara Industries, automotive Ghandhara Nissan, automotive Ghani Automobile Industries, motorcycles Hinopak Motors, automotive Indus Motors Company, automotive Master Motors, automotive Pak Suzuki, automotive Servis Tyres, tyres Sigma Motors, automotive TCM Automobiles, defunct automotive Food & beverage[edit] Dalda, vegetable oil Fecto Sugar Mills, sugar Madina Sugar Mills, sugar Mair Foods, rice, fruits Mitchell's Fruit Farms Limited, fruit Murree Brewery, brewery National Foods, spice OMORÉ, ice cream Ramzan Sugar Mills, sugar Shakarganj Mills, sugar Shan Food Industries, spice Shezan International, beverage United Industries Limited, food Personal & household goods[edit] Amir Adnan, clothing HSY Studio, fashion label Karma, fashion label Khaadi, clothing Pakistan Tobacco Company, tobacco Unilever Pakistan Limited, personal...
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...Case Study: Bombardier Serves Multiple Business Markets Background: “Bombardier is all about trains and planes.” Since 1942, Bombardier has been manufacturing transportation products from snowmobiles to planes; and even ventured into rail transportation industry. Now, it has established its name as one of the industry leaders when it comes to manufacturing of planes and trains. Statement of the Problem: As one of the industry leaders, how can Bombardier sustain its market holding amidst rising competition? Objective of the Problem: To be able to identify a market strategy that will help Bombardier sustain or even increase its market share in the industry. SWOT Analysis Strengths: • Knowledge, Expertise, and Adaptability to Customer Demands Bombardier knows what and how to give what its customers want. It offers the perfect ingredient which is important to any transportation business: fuel efficient with low operating costs. It gives importance to its customers’ specifications. It asks where and when its aircrafts will be used. Bombardiers offers wide array of products and services such as manufacturing commercial and corporate planes. Users of its corporate planes may be part owners when they have 50 or more flight hours. In addition, if customers occasionally need a private plane for specific trips, they may avail of Sky jet charter program. These are just few of the services Bombardier offers. With the upgrading of...
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...in the air travel industry over the last couple of decades witnessed a revamped approach and new ways in conducting business. Multiple airlines have adopted various ways of branding themselves but the most common approach was adoption of corporate social responsibility. These companies feature more of giving back to the community and participating in activities entirely different from their main line of operation. This paper conducts an empirical and qualitative evaluation of eight major airlines in the air travel industry and their adoption of corporate social responsibility. The paper is mainly structured in two major parts. Broadly stated, the first part is a theoretical perspective whereas the latter part captures the practical evaluation of CSR in eight airlines. Therefore, the first part irons the researcher’s understanding of CSR theory such as the participating stakeholders. In addition, this part captures an overview of CSR in the air travel industry as well as outlining accumulative gains to this trend. The second part covers the broader part of this thesis taking a practical approach. This part includes qualitative analysis, evaluation and review of CSR application programs in eight of the sampled airlines. The chosen airlines where selected by sampling from among three of the largest airline alliances globally. The sampled airlines include British Airways, America Airlines, Qantas, Lufthansa, All Nippon Airways, Air France-KLM, Delta Airlines and Cathay Pacific...
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...To analyze the Indian Commercial Aerospace market for Cobham India Pvt. Ltd By Satyendra Shukla 11P224 Management Development Institute Gurgaon 122 001 May, 2012 To analyze the Indian Commercial Aerospace market for Cobham India Pvt. Ltd By Satyendra Shukla Under the guidance of Mr. Lee Griffiths Director India Cobham India Pvt. Ltd. Management Development Institute Gurgaon 122 001 May, 2012 Executive Summary The project aims at to analyze the Indian Aerospace Industry and try to find out through secondary research the growth prospective of the same. Cobham has many capabilities that could be exploited to supply equipments and spares for the MRO (maintenance, repair and overhaul) industry in India. So we used the various reports and predictions available at the websites of Airport Authority of India, Directorate General of Civil Aviation, Ministry of Civil Aviation and websites of various airlines and MRO companies to understand the market dynamics. We came across various difficulties faced by them and also saw various opportunities lurking round the corner. We tried to estimate the fleet size of various airlines and the expected growth in next five years. Also the focus was given on the Non-Scheduled operators as their numbers is rising at a lightening pace. We also had the projections made by Ministry of civil aviation about the growth of passenger volumes in the future, and all the future growths...
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...The Boeing Company, Part II Political The Boeing Company is very involved in the politics of the industry. Therefore, Boeing has a Government Operations office located near Washington D.C., and the office serves the company in three ways. One way is that they work with government officials and organizations to protect and advance the company's interests, competitiveness, and reputation. This is very important because as the world’s largest aircraft manufacturer, Boeing does not want to get surprised by a policy or rule that could hurt the company. In addition, another service is to win government contracts. Recently, Boeing won a contract with the U.S. Navy for an order of 20 P-8A airplanes for $2.5 billion (Smith, 2016). Due the location of the office, Boeing was able to secure this contract, as well as many others over the history of the company. Lastly, Boeing and the government works hard to shape public policy issues that impact the company. The office works with public officials across all levels of government, federal, state and local, to work with the government to be compliant. Boeing’s team also works with various third party organizations such as associations, public policy groups, and international organizations (Boeing, 2009). The effective income tax rates for 2014, 2013, 2012 were 23.7%, 26.4% and 34.0%, respectively. Boeing’s 2014 effective tax rate was lower than 2013 primarily due to tax benefits of $265 million related to tax basis adjustments and $259...
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...Externalities There are quite a few negative externalities in the airline industry. A major one is the noise pollution by major airports. People that live near the airports constantly hear airplanes departing and arriving. This has been linked to heart disease, breathing difficulties and cancer along with other health issues. The airplanes emission is composed of about 70% CO2. CO2 contributes greatly to the greenhouse effect which is the cause for global warming. There are a few positive externalities along with this industry. Hotels near an airport stay busy due to the amount of travelers needing a place to stay.Wage Inequality Wage inequality is common in the airline industry since there is a big variety of jobs available. In order to address this topic, many states have a living wage ordinance which they use to try to control wage inequality. For jobs involving customer service, you will not earn anywhere near some other positions but then again you do not even need experience. Flight attendants need to be trained in the main city where the headquarters are to the airline they are working for. Some might also need to learn foreign languages. Pilots on the other hand are required to take many hours of training and get a few different types of licenses as well as getting certified. The only way to earn a higher then average income in the airline industry is to have specialized training and experience. An airline pilot makes an average of $113,024 annually. A flight attendant...
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...Stabilization Act of 2001 And it’s Effects on the Airline Industry Matthew J. Garcia Embry Riddle Aeronautical University Aviation Legislation/ASCI 254 February 23, 2012 Professor Peters THE AIR TRANSPORTATION STABILIZATION ACT OF 2001 2 Abstract Due to the devastating acts on September 11, 2001, a bill was passed after. The Air Transportation Safety and System Stabilization Act of 2001 was an aid to help the airlines industries in their decline in sales, loss of profit and intimate bankruptcy. The act provides assistance to U.S. passenger and cargo airlines through $5 billion in grants, up to $10 billion in federal credit assistance, extended deadlines for tax payments, and reimbursements for certain increases in insurance premiums. The act was a huge bailout relief for these airline companies. Although it made the commercial airline industry happy, it may not have been so for many others. In an already declining economy this bailout increased the countries debt as well as cost money for the American taxpayers. Maybe there could have been a better way to deal with this situation, however it could have been the best thing to do, all in all only time will tell. THE AIR TRANSPORTATION STABILIZATION ACT OF 2001 3 On September 11, 2001 at 8:46 a.m., five hijackers crashed American Airlines Flight 11 into the World Trade Center's North Tower...
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...discusses the history of Boeing and salient forces affecting the global aircraft industry, along with the key strategic issues driving Boeing’s competitive strategies. Boeing and Airbus dominate the global aircraft industry, but have very different visions of the future of commercial air travel. Consequently, the strategies they have devised to manage the competitive environment are disparate. The case provides a unique opportunity to explore these differences, how functional strategies support the overall competitive strategy, and the critical decisions now faced by both competitors. The objective of the case study is to evaluate current industry conditions and to make corrective recommendations to improve Boeing’s strategy. The shortcomings of the company’s functional strategies should also be examined in search of measures to improve organizational performance. * Compare the two competitor's strategies. Based on the industry environment, what conclusions can be drawn? * Since Boeing made its decision to pursue a product strategy based on the point-to-point airline business model, what new market conditions have developed? What impact are they likely to have on the company’s success? * Evaluate the pros and cons of Boeing's outsourcing strategy. Is there adequate support for the company's decision to "offload" parts production? * Consider the status of commercial aviation globally. Do Boeing's international strategies position the company...
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