Project 2 Document

4. How did the deregulation of the airline industry in the late 1970s influence labor relations at Magic Carpet Air?

Delta airline uses merger so as to be able to expend its business. In 2008 the company merged with Northwest airlines. It operates in Europe, North America and Asia/Pacific regions. Once the merger was complete, Northwest Airlines and all its constituents become wholly-owned by Delta Airlines. The merger saw to it that Delta Airlines started operating in the Northwest for FY 2008. In the period of two month that is from October of 2008 the time the merger was completed to December of 2008, the company had increased it revenues to $2 billion. Having a flexible nature, allows Delta to improve customer services, and in the long run be able to achieve its strategic objectives.

2. United Airlines likes to use strategic planning to try and stay ahead of the competition but in its history it has not always worked. United Airlines has tried to make mergers without the approval of the union and were not able to complete it when the department of justice said that the merger would not happen because it would bring a loss in competition. One of the things that has helped the business, is that they use a hub and spoke method for their passengers. This allows the company to provide many different air ports and terminals that its customers can use and also helps to stream line flight schedules and saves the company millions of dollars every year. Partnering with these major companies to form a global alliance helps to circumvent national laws, share resources to develop additional routes and global marketing strategies. The major alliances were Star, Oneworld, SkyTeam, and Wings. The agreememnt that these companies made to work together saved all of the millions of dollars and was able to help all of the companies to compete globally.

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.

Northern Airlines merged with Southeast Airlines to create the fourth largest U.S. carrier in which it inherited both an aging fleet of Boeing 727-300 aircraft and Stephen Ruth.

United Airlines and Continental Airlines, two major airlines companies, agreed to a merger that would create the world’s largest airline. Such important deal has a lot of problems to be dealt with, from technical, for example how to put the companies databases together, to more fundamental, like how the company should be ruled.

The case represents the competitive issues faced by a creative, innovative, and a well-established airline, Delta Airlines Company, which had successfully earned a reputable name in the airline industry with all its significant efforts. The company started its operations in the year 1928 and with the help of strong and effective leadership, the company successfully gained access to new routes, which ultimately resulted in the increased revenues for the company. The industry is filled with the number of competitors including the low cost carriers as well as the legacy carriers. However, the company is one of oldest company in the industry, which significantly helps in recovering from the major challenges occurred in the overall economy. The company over the years had a strong focus on the customer’s satisfaction that helped in the recovery of US Federal Airline Deregulation Act in 1978, which was coupled with recession in early 1980s. Both the issues have negatively affected the overall industry in form of heavy losses. From the financial analysis, it can be seen that underlying company in this report with effective management, turned to profitability in 1990s.

United attempted to solidify the strategy even further "shuttle by united" coded U2 of replicating many operational features of Southwest Airlines. " lowering operating costs as a higher priority since United's cost for shorter domestic routes ,under 750, miles was 10.5¢ per available seat mile. United's targeted cause her seat that was 7.5 cents for its shuttle operations." (4). Shuttle by united even implemented Boeing 737 jets with a 20 minute air prep turnarounds, while personnel attended enculturalization and motivational classes that emphasized teamwork and customer service. Shuttle by United went as far to match Southwest's flight prices and frequent flier miles. United had a clear intiative that show intial success but when you compete on price things usually backfire at the end, as it did with Shuttle by United with low profit margins causing them to ditch their plans.

The objective of United is to make a continuation of growth in the market share simply through offering the lowest rates in terms of fares. Currently, the health of US economy relies heavily on United Airlines. Businesspersons travelling have been seeking participation in meetings for companies through meeting spaces that are vital like the second life by telephone and videoconferencing. Many families have sought out from flying to location of vacations because of the economic downtown in the two previous years and the weak stock market, as well as concerns of job security. However, experts are trying to resolve the case arguing that the economy of United States is recovering. This is

United Airlines is the second of the world’s largest, and strongest, airlines. From humble beginnings as a small air mail providers flying Contract Air Mail (CAM) route 5 from Elko, Nevada to Pasco, Washington rail road center, to an airline today that is a premier member and cofounder of the Star Alliance, with numerous other airlines that span the globe, United has had a long and colorful past.

The merger between American Airlines and U.S. Airways is one that can be explained using static game theory models. The two players in the game would be American Airlines and U.S. Airways. Each one of the players would have something to gain from the merger, but they would also have something to lose. In this game American Airlines is our first player. American Airlines’ potential payoff is merging with a company that is maximizing profits, but is also lacking in the customer service department. U.S. Airways is player two, and in this game they are merging with a business that is suffering from chapter 11 bankruptcy, but is excelling in customer service.

The system of governance at United Airlines is a straightforward Bureaucratic control. At the core of their governance are principles that are the foundation for investor and shareholder respect and trust. The principles that are practiced are essential to the reputation of United as a whole and are solely focused on organizational excellence, effective operational performance, and above all, integrity. The Board of Directors and the management teams at United Airlines work collaboratively under this corporate governance and guidelines, and include the policies

United Airlines used questionnaires to classify their potential customers by their motivations and identified nine motivational segment profiles which are: global executives, schedule optimizers, corporate troopers, mile accumulators, reluctant travelers, tour takers, quality vacationers, travel seekers, and frugal flyers (The Times 100, 2003, p. 2). The reasons why travelers choose to fly United varies. For example, some may choose this airline because of price, while others choose it because of their frequent flyer program, schedules, or other services.

5. How does the merger between Delta and Virgin Airlines impact the company as a whole? (Outside research required).

In the last decade, Continental Airlines has had a spotty track record. The airline twice filed for bankruptcy, realized diminished performance culminating in a $613 million loss in 1994, and was ranked dead last in industry indicators such as on-time performance among the major carriers. During these years, employees at Continental had undergone several series of layoffs and withstood both wage cuts and delayed wage increases in an effort to slash Continental’s costs. The result of these efforts was a demoralized workforce and a corporate reputation that put Continental near the top of Fortune’s list of “least admired” companies.