Case study 1 “Robert L. Crandall: American Airlines”

Two of the largest competing airlines in America may seem to have a lot in common to a consumer’s eye: big commercial planes, friendly staff, one free carry-on bag, complimentary snacks. Maybe the biggest comparison of them all is how much of the airline market these two companies take up. But for every similarity, there must be a difference. Beyond contrasting ticket prices, there are many fronts on which to compare Southwest Airlines and American Airlines. To begin when the companies began, American Airlines was established approximately 40 years sooner than Southwest Airlines as a result of a merger. In terms of people, Southwest Airlines currently has just about half the number of employees that American does. However, to truly compare the two companies, the organization itself must be researched and analyzed. Southwest Airlines and American Airlines appear to be very different to this day in terms of organizational culture, team dynamics, and conflict and negotiation.

Before David Neeleman’s non-compete agreement with Southwest Airlines expired, he envisioned the concept of starting a low-fare airline that would combine common sense, innovation, and technology and bring the humanity back into air travel (Gittel & O’Reilly, 2001). In 1998, JetBlue was born. In order for David to fulfill his goal of a “do-it-right” kind of airline, he needed to recruit superior industry veterans who were willing to start from scratch and place an emphasis on employees and customers. Each of these individuals, from the President, General Counsel, CFO, and the HR director, wanted to create an airline that was fun, had

ARMSTRONG, M. (2011) How to be an even better manager. 8th ed. London: Kognan Page.

Kessler, E. H. (Ed.) (2013). Encyclopedia of management theory (Vols. 1-2). Thousand Oaks, CA: SAGE Publications Ltd. doi: 10.4135/9781452276090

In the past three years the airline industry has faced an unparalleled list of challenges and American Airlines has certainly had more than the others. Year by year AA has tried to recover with a great deal of effort to turn the company around. The strategies they are applying to counteract the status are : Lower costs to compete, give to the customers the service they are expecting

Kessler, E. H. (Ed.) (2013). Encyclopedia of management theory (Vols. 1-2). Thousand Oaks, CA: SAGE Publications Ltd. doi: 10.4135/9781452276090

Southwest Airlines represents a rather unique organizational force that has driven the company to success since its inception in 1971. One of the most unique features about the organizational structure is that it is largely decentralized and employees are openly welcomed to express their opinions on a wide range of organizational issues. However, despite the "hands off" management strategy, the company consistently ranks as one of the top airlines in regards to customer complaints; in 2008, for example, the company received 0.25 complaints on average for every one hundred thousand passengers who used the aviation services (Triangle Business Journal, 2009). This analysis will look at some of the organizational factors that have contributed to the success of Southwest Airlines over the course of the last few decades.

American Airlines (American) made four fundamental changes to its rates. First, it moved to a four-tier rate structure; American offered first-class rates and three tiers of coach: full-fare, 21-day advance purchase and 7-day advance purchase. Overall, it expected to reduce coach fares by 38% and first-class fares by 20% to 50%. Though full fare coach prices dropped by about 38%, advance-purchase fares dropped by 6% when compared to the advance purchase tickets already being offered. Through this fare structure, American also eliminated deep discount tickets. Second, American eliminated the negotiated discount contracts of many large

Reilly, M., Minnick, C., & Baack, D. (2011). The five functions of effective management (2nd ed.). San Diego, CA: Bridgepoint Education, Inc.

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

This short paper is an overview of Southwest Airlines, its strategy, and what role Human

Locate four articles or books on your philosophy written by different management theorists and published in the past 5 years in academic literature. At least two must be from peer-reviewed journals. The articles or books may be theory articles, research articles, or a combination.

Piedmont Airlines recently invested over $1 million in state of the art equipment and employee development in order to forecast and analyze the appropriate amount of discounted fares to offer per flight. The company discovered that by offering several discounted flights to consumers willing to book their travel well in advance of their departure date left many options available for the business traveler who needed to book much closer to the actual departure date. The analysis was the task of the Revenue Enhancement Department (RED) managed by Marilyn Hoppe. While this state of the art equipment was a step in the right direction, Marilyn believed that there were still a lot of subjective decisions being made and

Bergman, R. Coulter, M. Robbins, S., & Stagg, I. (2012). Management 6 (pp. 86-91). New South Wales: Pearson.

This paper will review the case study of Delta Airlines which was suffering like all its competitors with rising fuel costs which averaged anywhere between 30 to 50 percent of its total operating costs. This paper will answer six questions which will help identify what the company did to handle the high cost of fuel. The questions that I will answer will include the following.