Case Study: Independence Air

The article was reported in the National Geographic Traveler Magazine in the December 2012/January 2013 issue. Christopher writes about two separate airlines and the potential of what could make or break a person. He used different points to breakdown what airline companies are doing to the economy. He published the article to make people become more conscious thinkers and look at the entire package/company when it comes the cost of booking with an airline. Let’s look at how the customer service, expenses and hospitality play a factor when choosing an airline. The Good versus the Evil in the air.

Southwest Airlines Co. is an airline company that offers air transportation services within the United States and in international markets. The company operates within the airline industry that is highly regulated, technology intensive, labor intensive, and highly competitive (Southwest Airlines, 2017). Southwest Airlines operates a service business whereby the company offers a point to point air transport service to its passengers. Other than passenger transport, the company offers transportation services for pets and unaccompanied minors. The flights offered include short haul and long haul between various destinations within the United States and internationally. In 2016, the company’s operating revenues from international operations amounted to $383 million. A unique feature of the Southwest Airlines is its cost structure whereby the company focuses on cost discipline and uses one aircraft type to minimize costs.

If Mark and Todd choose this option, they could budget accordingly each month. If they are struggling they could forgo the additional principal payment during any given month. By choosing this option, S & S Air could save money and have flexibility in the mortgage payments.

Air Canada has been in the business of air transport for an extended period of time. Due to the experience and the exposure of the carrier in the field, it has made a commendable progress through many strategies as well as customer proximity. One of the approaches taken by the airline involves the identification as well as an implementation of cost reduction initiatives in a bid to increase revenue from its operations (Air Canada, 2016). It is also attempting to connect with the existing carriers across the world to connect the current customers to the international world. This approach has been adopted to increase its competitive advantage over other existing airlines.

On October 1st, 1994 when United Airlines introduced their “Shuttle By United” high-frequency, low-fare, minimal amenity, short-haul flight operation, Southwest Airlines was already the industry leader in this market segment. Southwest was the eighth largest airline in the United States based on the number of passenger miles flown

At the onset of the airline industry in the United States, major network airlines were the sole providers of air travel. This multifaceted industry was a difficult industry to break into as a consequence of “sophisticated customer segmentation, hub-and spoke models and costly information systems for reservations, fare wars and intense competition” (Thompson 2008). Shrinkage in airline ticket prices augmented the demand for airline travel. Many markets were simply deserted or over-looked by major network airlines; this is a region a fresh “second tier of service providers” could enter into. This endeavor proved to provide a consumer savings of billions per year. Thus in June of 1971, after a tumultuous battle with other Texas-based

Airborne Express the current underdog in the express mail business has been able to compete with market leaders due to innovation and optimization strategy. The company built on cutting cost and emphasizing reliability now faces pressure from the leaders UPS and FedEx to change their pricing strategy. This change from standard rate pricing to distance-based pricing puts Airborne in a dilemma in which they must choose to match the competition which will make them lose what sets them apart in the market or stay with the current strategy. Changing will increase their flexibility and could open them up to new consumers while staying the same

The Sealed Air corporation is committed to market leadership through technological innovation. Ten years ago, the company was first to market with a highly successful coated air-bubble packaging protection product, AirCap. However, market trends indicate a rapid displacement of coated bubble by a technologically inferior yet inexpensive uncoated product. Burgeoning demand for uncoated bubble poses a direct threat to the long-term viability of the technologically superior, premium priced AirCap.

Provide examples of three businesses (from the MOS book) that faced the same economic issues by Airborne.

1. From the point of view of the industry incumbents, is the express mail industry attractive? How has Airborne survived, and recently prospered, in its industry? Is its success attributable to its capabilities, its position, or industry attractiveness?

There have been few inventions to change how people live and experience the world considerably as the creation of the airplane. Today, traveling by air has become the norm and it would be difficult to imagine life without it. Air travel has improved the way people are able to conduct business by shortening travel time and changing their thought of distance. The companies within the airline industry exist in a very competitive market. One of those companies, Southwest Airlines, features low-fare, no-frills air service with frequent flights of mostly short routes. Costs are kept down by the exclusive use of Boeing 737 aircraft, which allows for low maintenance costs and quicker turnaround times for flights, and by an emphasis on ticketless travel (Encyclopedia Britannica). This paper will address two segments of the general environment and how they affect Southwest and the airline industry; evaluate how Southwest has addressed two forces of competition; predict what Southwest might do to improve its ability to addresses these forces; assess the external threats affecting Southwest; discuss Southwest’s greatest strengths and most significant weaknesses; determine Southwest’s resources, capabilities, and core competencies; and analyze their value chain.

result of this, no other airline in the industry’s history has enjoyed the customer loyalty and

With 1988 operating income of $801 million on a revenue of $8.55 billion, American Airlines, Inc. (American), principal subsidiary of Dallas/Fort Worth-based AMR Corporation, was the largest airline in the United States. At year-end 1988 American operated 468 aircraft on 2,200 flights daily to 151 destinations in the United States, Bermuda, Canada, Mexico, the Caribbean, France, Great Britain, Japan, Mexico, Puerto Rico, Spain, Switzerland, Venezuela, and West Germany.

In this case, a good model of business ethics would include the plus model of decision-making. According to the model, it is

Most people who have flown have likely encountered, at some point, a screaming or crying child on a plane. Some passengers may express annoyance and frustration while others breathe a sigh of relief because their child is sitting quietly beside them. A few who can relate because they have been there and done that may even attempt to lend a helping hand to the frazzled parent. In most cases, passengers have had to, in one way or another, deal with the screaming child. Air Tran recently decided to handle things a little bit differently and their decision to remove a three year old girl and her family from a plane because she was throwing a tantrum has sparked some controversy. Julie and Gerry Kulesza and their daughter Elly were scheduled to return to their home in Boston on January 14th following a trip to Fort Meyers, Florida. Reportedly, when the family boarded the plane in Florida, their daughter got upset and refused to be strapped into her seat. Judy Graham-Weaver, spokesperson for the airline, reported that the child was "climbing under the seat, hitting the parents, and refusing to sit in her seat." The incident continued for fifteen minutes past the scheduled departure time and at that point, the crew and other airline personnel decided that the family needed to get off the flight so that it could continue as scheduled. The child 's parents claim that they did not have enough time to calm their child down. Julie Kulesza said, "We weren 't given an opportunity to