Scandinavian Airlines: The Green Engine Decision Scandinavian Airlines serves 32 million people and is the largest airline in Scandinavia. It has been a first-mover in many areas and has built a positive reputation for corporate responsibility. Having decided to update its fleet with 55 Boeing 737s, SAS now has to decide whether to purchase DAC green engines. Arguments for and against purchasing the green engine – Director of Aircraft & Engine analysis Having spent almost five years on the decision to purchase a new fleet of airplanes, Nas the director of aircraft and engine analysis, was fully involved and committed to researching and presenting the best option to SAS’s management team. The arguments for purchasing the DAC …show more content…
Arguments against purchasing the engines include the significant cost requirement, the opportunity costs, and the uncertainty of the operating effectiveness of the new engine technology. The cost of the engines is significant, adding about $21 million dollars to the whole fleet. This money could be spent on other features on the planes, such as a different engine, individual entertainment options, more comfortable seats, or ‘forward air stairs’. These are the opportunity costs of purchasing the engines and must also be considered in the decision. Finally, the engines use a technology that, although developed in the 70s, has not been used on 737s and thus may result in additional costs to ensure the engines operate properly and are delivered on time. Arguments for and against purchasing the green engines –SA S management team The management team at SAS has many of the same arguments for purchasing the green engines, but has a primary focus of establishing a clear financial cost-benefit analysis. SAS’s management team will argue that purchasing the engines will have a strong impact on its brand image and will allow the company to compete in the industry through its customer’s loyalty. Ultimately this loyalty will drive revenues and will determine if the company can remain in operations. Another argument will be the benefit of curtailing the expected
r market by entering into strategic code-sharing agreements with international carriers, such as Cathay Pacific , and American Airlines
Danville Airlines has created an ethical and legal dilemma by not being accurate, precise and clear on how they are doing medical testing, causing undue stress and potentially career-ending circumstances for David Reiger, one of their best pilots. What Danville did was illegal and unethical due to negligence. David Reiger has every right to sue them to continue flying, and the medical evidence suggests that the Huntington's disease gene can be dormant for decades before being active and changing a person's nervous system (Darden, 2004). The company has violated the 1974 Privacy Act, the Heath Insurance Portability and Accountability Act of 1996, and the 1990 Americans With Disabilities Act. As is best practice with the nascent, emerging field of genetic testing, Danville did not warn Reiger of the testing taking place, did not get his permission, and didn't even have a process in place for dealing with pilots, whom the traveling public relies on for safe transport, when they are tested positive for these types of diseases (Murry, Wimbush, Dalton, 2001). Clearly Reiger would win any lawsuit, the collateral damage to Danville being the lack of oversight and gross negligence in managing health screening.
Airbus was planning to introduce the A380 in direct competition to Boeing 747 to compete in the large aircraft sector. The rivalry between Airbus and Boeing was already intense. Boeing’s market share reduced from 70% in 1974 to 45% in 1990 while Airbus’s market share had increased from 1% to 34% during the same time (Exhibit 5). Encouraged by this increase in market share, Airbus was contemplating the introduction of A380. Development of new product line is extremely expensive in the Aircraft sector. Following is a quantitative analysis of the project to calculate the risks involved in introducing a new line of Aircrafts.
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.
As Motorking Corporation considers introducing its now “gas extender” product into the market, the management must consider various factors to determine if this is a good financial move. The production manager needs to determine if the product will generate a profit for the corporation, how much product is expected to sell to determine how much to produce and how much to outsource.
Boeing being the market leader for almost a decade as a manufacturer of large commercial aircraft and had also reached economies of scale, the need to sustain its market share it presumed that “customers might demand for new”. Any potential growth was only through taking super leap and making VLCT jumbo aircraft which needed
Boeing adopts a very thorough, well planned out process to manage the project. The stages are defined clearly and tasks involved in each stage are carried out sequentially. The first stage of their approach is the project definition phase during which Boeing identified holes in the market not met by existing planes, assessed future airline needs, considered alternative plane configurations, explored feasibility of possible technologies and performed preliminary estimation of costs. During the market assessment, analysts gathered information regarding future needs of airlines by speaking directly to
2. The London based Airline could have verified their passenger list and should have identified Prof. McPherson as a Gold card member and a loyal customer and should have taken any one of these actions based on the situation:
Market Share Airbus will launch their new large, long distance plane A380 in 2006. This plane can be a dreadful competitive product to Boeing. If Boeing falls behind regarding innovations, fuel efficiency and other attributes of a long haul airliner, it will soon lose its market share. In order for Boeing to compete in the aviation industry, it is crucial to take on some risk and develop this new 7E7 project. This helps the company to fight against its competitors and recover from the slump in the industry.
1.) In early 2003, Boeing announced plans to design and sell an airliner named the 7E7. Boeing aimed for the 7E7 to be more fuel efficient, carry between 200 and 250 passengers, able to accomplish both domestic and international flights, as well as be 10% cheaper to operate than Airbus’s A330-200 aircraft. All of these attributes were attractive to Boeing but would come at significant costs. To accomplish these attributes, Boeing proposed to construct the aircraft
3. As Boeing, how would you respond to this situation? How does your answer depend on what you think Airbus is likely to do? Please provide some calculations to support your answers.
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
GM has marketed the Chevy Volt as not a green car, but focused mostly on the technological aspects of it with a bit on the electric aspect. There is not a very large market for electric cars, especially for when selling to the average car consumer, so they had to essentially sell the idea that people want an electric car, and then sell them on the Volt. It was billed as the newest, most technologically advanced car in the market that has less of an impact on the environment without having to drastically change your way of life.
a. From the perspective of the Director of Aircraft and Engine Analysis, two arguments for purchasing the green engines include; producing significantly lower NOx emissions and would represent a strong commitment to the future environmental improvement of the airline. With the anticipation of increased emissions charges and taxes in the European industry, the company could have positive financial implications with the minimized risk of future operational limitations from the combination of international, federal, regional and local legislation. The Director of Aircraft and Engine Analysis could argue against the purchase of
Nevertheless, Audi’s US sales continue to rise despite the EPA’s stop-sale order for its diesel engines. Indeed, customers have discovered that the marque’s family of gasoline-powered models are a sufficient substitute — lower fuel prices across the board has relieved consumer pressure to find the most efficient cars too.