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Aviation industry topic
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The domestic environment for Delta Airlines is the United States. In the US airline industry, there are more than 100 passenger airlines that operate over 11 million flight departures per year. Delta Airlines is one of the largest in the airline industry and can carry over one-third of the world’s total air traffic. “The US airline industry reported over $160 billion in total revenues, with approximately 545,000 employees and over 8,000 aircraft operating 31,000 flights per day” (Airline Industry Overview, n.d.). There are many economic impacts that can affect the airline industry and range from its direct effects on employment, company profitability and net worth to the indirect effects on the aircraft manufacturing industry, airports, and tourism industries. The economic impacts also extend to virtually every industry that the ability to travel by air generates. The commercial airline industry contributes about 8 percent of the US Gross Domestic Product, according to recent estimates (Airline Industry Overview, n.d.). One of the twentieth century’s key thinkers is W.W. Rostow. He developed the five stages of economic growth in which all countries must pass to become developed. These stages are traditional society, preconditions to take-off, take-off, drive to maturity, and high mass consumption. His theory suggests that all countries start at one of these stages and eventually climb upward through each stage as they become more developed (Jacobs, J., n.d.). Delta Airlines is in Stage 5, mass consumption, according to Rostow’s stages of development. Rostow believed that the last stage was occupied by mainly Western countries, in particular the United States. When a country finally reaches the last stage of development,... ... middle of paper ... ...f John Kenneth Galbraith. Review of Political Economy, 17(2), 177. Retrieved March 21, 2014, from https://www.academia.edu/3150353/The_economic_contributions_of_John_Kenneth_Galbraith Jacobs, J. (n.d.). Rostow’s Stages of Growth Development Model. About.com Geography. Retrieved March 20, 2014, from http://geography.about.com/od/economic-geography/a/Rostow-S-Stages-Of-Growth-Development-Model.htm Search All Jobs. (n.d.). Delta. Retrieved March 22, 2014, from http://www.deltajobs.net/travel_and_benefits.htm Stricklin, R. (n.d.). Building Innovative Corporate Learning Beyond the Workplace. eLearn Magazine, an ACM Publication. Retrieved March 21, 2014, from http://elearnmag.acm.org/archive.cfm?aid=2134470 Airline Industry Overview. (n.d.). Global Airline Industry Program. Retrieved March 20, 2014, from http://web.mit.edu/airlines/analysis/analysis_airline_industry.html
The Airline Industry is a fascinating market. It has been one of the few industries to reach astounding milestones. For example, over 200 airlines have gone out of business since deregulation occurred in 1978. Currently, more than 50% of the airlines in the industry are operating under Chapter 11 regulations. Since 9/11, four of the six large carriers have filed for and are currently under bankruptcy court protection. Since 9/11 the industry has lost over $30 billion dollars, and this loss continues to increase. Despite the fact that the airline industry is in a state of despair, JetBlue has become the golden example, a glimpse of what the industry could be.
Higgs, Robert. "POLITICS & PROSPERITY." POLITICS PROSPERITY. N.p., 01 Sept. 2010. Web. 12 May 2014.
Many elements of Delta Airlines are described in detail, within this paper. There is a breakdown of the external and internal factors, using external and internal analysis. Porter’s Five forces are used to create the external analysis, and the key factors for Delta are power of buyers, and rivalry. Delta’s competitive advantages are identified as customer service, sustainability, brand image, strong strategic alliances, and corporate travel. Delta’s main issues are the low expansion in international markets, continuous changing of incentive program, and glitches within technology. Delta should expand more into the Chinese and African markets in order to gain market share within the airline industry.
As airline industry is a competitive marketplace, the airline companies use new technologies to improve their efficiency and decrease the overhead costs, including ‘advanced aircraft engine technology, IT solutions, and mobile technology’ (Cederholm 2014). The technology changes including technology improvement, new innovation and disruptive technology. The disruptive technology need to meet the characteristics of ‘simplicity, convenience, accessibility and affordability’ (Christensen 1995). The technology changes would bring both opportunities and threats to airline companies. Since Labour cost and fuel costs occupy 50% of most airlines operating cost (Groot 2014). Therefore, if new technologies could be disruptive in the two aspects, there will be important changes to current airline
Journal Of Political Economy, 95(6), 1307. http://www.brainyquote.com/quotes/quotes/b/benwhishaw517375.html#BuGImMQjmwhFOTBO.99
Airline and travel industry profitability has been strapped by a series of events starting with a recession in business travel after the dotcom bust, followed by 9/11, the SARS epidemic, the Iraq wars, rising aviation turbine fuel prices, and the challenge from low-cost carriers. (Narayan Pandit, 2005) The fallout from rising fuel prices has been so extreme that any efficiency gains that airlines attempted to make could not make up for structural problems where labor costs remained high and low cost competition had continued to drive down yields or average fares at leading hub airports. In the last decade, US airlines alone had a yearly average of net losses of $9.1 billion (Coombs, 2011).
Southwest Airlines is one of the most successful airlines in the United States. There has never been layoffs or strikes in the history of the company, although there were several times when layoffs could have been justified, including the months following the September 11, 2001 terrorist attacks. However, Southwest's Mission statement says “Above all, Employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest Customer.” (Southwest, 1988). The Airline has always believed that their corporate culture is one of the keys to their success. The culture recognizes that employees have emotional intelligence and that their attitudes and morale are key to the teamwork and creative environment.
Delta Airlines has been a vibrant company in the airline industry, with great success over the years. Delta airlines started as a crops dusting company to serving more than 572 destinations, in 65 countries on six continents (Allan, H., David. H. ,2012). Delta airline moved its headquarters from Monroe, Louisiana to the city of Atlanta, Georgia. The great management strategies have portrayed from time to time to be fruitful even in the verge of a recession. With these consistency in delivery of services, it is clear that the company is out to outdo its competitors and turn out to be the greatest airline in the world.
Tom, Y. (2009). The perennial crisis of the airline industry: Deregulation and innovation. (Order No. 3351230, The Claremont Graduate University). ProQuest Dissertations and Theses, , 662-n/a. Retrieved from http://search.proquest.com/docview/304861508?accountid=8364. (304861508).
When analyzing Delta, you do not have to search very far before quite possibly one its strongest attribute rears its head. Based on calendar 2000 data, Delta is the largest U.S. airline in terms of aircraft departures and passengers enplaned, and third largest as measured by operating revenues and revenue passenger miles flown. Delta is the leading U.S. airline in the transatlantic, offering the most daily flight departures, serving the largest number of nonstop markets and carrying more passengers than any other U.S. airline. Delta Air Lines transports more passengers worldwide than any other airline. Through a vast worldwide route system Delta has flown over 117 million passengers, more than any other airline in the world. Delta mainline, domestic and international service, Delta Express, Delta Shuttle, Delta Connection®, Delta Sky Team and Worldwide Partners operate 6,400 flights each day to over 450 cities in 98 countries.
Friedman, Milton. An Economist's Protest: Columns in Political Economy. Glen Ridge] N.J.: T. Horton, 1972. 6-7. Print.
1. Issues 2. American Airlines’ objectives 3. The airline industry 4. Market 5. Consumer needs 6. Brand image 7. Distribution system 8. Pricing 9. Marketing related strategies 10. Assumptions and risks
Airline industry is affected by no. of factors such as fuel price fluctuations, high fixed costs, strong influence of external environment and excessive use of marginal costing by carriers. Recessions in the industry tend to last longer, while recovery periods are generally shorter. Over the past nine years, it is observed that industry has made losses for five years and during the profitable years margins were on a lower end. The airlines industry is acutely sensitive to external events such as wars, economic instability, government policies and environmental regulations.
...an overabundance of information all applicable to the topic. My feeling was that such an overwhelming load of facts and systems directed me away from the most important facts of the chapter. Its imperative that the student understands the small scale relationship to economic development. Therefore my attempt was to highlight the main topics of the chapter and relate them to the reader to provoke intrest and thought towards many of these important life changing situations that occur everyday. If one can see past all the theories primarily and see the cause and effects behind them, they’re appreciation for the ideas stated in the theories.
Thus, Rostow's development ladder is highly challenged as it gathers a lot of critiques. Rostow's five stages of economic growth begin with the traditional society. As described by Rostow, the underdevelopment is naturalised in this structure with the evidence of constrained production means such as technology. In this part, the society applies subsistence economy that technically results in small margins of productivity such as hunter-gatherer society (Sahlins 1972:1). Undesired to do nature exploitation, Rostow viewed society at this stage as restrained from progress.