Most organizations would not revel private information to the public only insiders know what was really going on at American Airlines, such organizations are structured to pay worker bees at the bottom of the pyramid low wages, while continuing to high figure salaries at the top, new contract negotiations are not much different than prior ones. In fact, information on the outside that CEOs and other executives present to the public do not necessarily represent what's going on inside. After reviewing this video, I observed in this clip that Mr. Carty expresses frustration that many executives in a union environment face, labor costs. However, Mr. Carty did not really appear to be thwarted, and the gentleman in the middle also had an interesting …show more content…
The company should have analyzed the preparations prior to the negotiation process with the labors in order to effectively implement the concept of labor relations and collective bargaining in the organization. The cost cutting strategy was termed as the necessary action by the company after the event of September 2001 (Orenic, 2009). The strategy enabled the company to bring down their capacity in the market to balance with the number of passengers of the airline. This action brought about the inclusion of government in the airlines and they cut down their costs on the expense of the traveling passengers that is the general public and the employees of American airlines that are the labors and workers. The company could have prepared their strategies for the future based on the response expected in lieu of the strategy announced by the airline in the marketplace. As a result, the company has faced a severe back down in the demand of customers and revenues. The company should have installed more and more capacity in order to strengthen the revenues of the company and increase the services according to the demands of the passengers. The airline could have prepared an agreement to restore back the wages of the employees just after the crisis handling process in order to retain and maintain the market position of the American airlines (Hollenbeck & Wright,
One of the main drivers of the merger between American Airlines and U.S. Airways is the American Airlines Chapter 11 bankruptcy filing on November 29, 2011. American considered merging with another airline as a critical aspect of their reorganization. Early in the bankruptcy proceedings creditors expressed concern about their stand-alone restructuring plan. Some of American Airlines largest creditors were their labor unions. The unions, who pushed for the merger with US Airways, believed it would give the new larger company a stronger competitive advantage over the rest of the market, including other recent mega mergers. 12
The topic in which I chose to do a scrapbook on was “How the government affects the airline industry in Canada”. Specifically I chose articles that related to the aftermaths of the September 11th tragedy. This event affected airlines in an enormous manner. Many airlines were facing economical problems and in turned asked the government for assistance. As a result, Canada 3000, which was Canada’s second largest airline carrier filed for bankruptcy protection on October 11th.
After September 11th, 2001, the airline industry experienced a significant drop in travel. The reasons for the airline industry downfalls also included a weak U.S and global economy, a tremendous increase in fuel costs, fears of terrorist's attacks, and a decrease in both business and vacation travel.
Kotter’s steps 5, Enabling Action, and 6, Creating Short-Term Wins contribute to the success of a change effort by enabling all involved parties to make meaningful contributions to an organization’s progress, while seeing timely results that maintain the effort’s momentum (Cohen, 2009). Alaska Airlines successfully implements a sustainable change agent with key performance indicators and measurable metrics to empower employees for broad-based action that allows employees to see how short-term successes within each department turn into long-term growth for the organization. Ben Minicucci manages to integrate universal key metrics that focus on cross-divisional collaboration and alignment to reinforce the actions and interdepartmental communications
“Without change there is no innovation, creativity, or incentive for improvement. Those who initiate change will have a better opportunity to manage the change that is inevitable.” William Pollard’s, a 20th century physicist, words show us the power of being proactive, and igniting change to strengthen a company’s productive climate (Sellers, Boone, Harper, 2011). Acme Airlines flight attendants lacked incentive to improve the quality of their work, as a result of distrustful management and overall frustration within the company. Acme took successful steps to rebuild their FA program into a more relationship oriented work environment. Through an understanding of effective leadership, we will use the
Along with the low stock index numbers of September 17th, the airline industry and travel stocks were also rocked. One of several airlines announcing layoffs, US Airways said that they would be terminating 11,000 jobs. These heavy losses were contributed to airlines “being grounded last week [week of September 11th], plus passengers have been apprehensive to fly, in the wake of the hijackings” (Stock Markets Reopen 1).
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).
It has stayed relevant to the market through its propelled philosophy of relationships to generate profits in the business. Since its establishment in Monroe, Louisiana the once tiny airline has stretched to greater heights serving in 6 continents. It has also established a distinguishable name among its competitors with a reputation of leading customer services. However, even as an established venture, the company needs to maximize its profits in order to stay in business and expand in to new territories beyond its conquered boundaries. A strategic analysis was carried out by our team to establish the company’s current situation. A SWOT analysis was performed to come up with three referenced, strategic alternatives. This alternatives are meant to act as a strategic guidance to the company in order to enhance growth. The strategic recommendation provided will improve and enable the business to cope with the competitors while the implementation of the strategy section will outline the way to go about achieving these alternatives in the business setting. Lastly, we put up a discussion on the evaluation procedures and necessary controls for the
Yet amidst the storm, some regional airlines such as Jet Blue Airlines have managed to focus on specific markets and maintained or increased their profits. It is no doubt that Porter’s 5 forces of competition are at play in this industry. These forces are the Threat of Substitutes, Threat of New Entrants, Competitive Rivalry, Bargaining Power of Buyers and Bargaining Power of Suppliers. Threat of Substitutes The airline industry has been plagued by rising costs resulting in poor profits.
The perennial crisis in the airline industry: Deregulation and innovation. Order No. 3351230, Claremont Graduate University). ProQuest Dissertations and Theses,, 662-n/a. Retrieved from http://search.proquest.com/docview/304861508?accountid=8364.
Several large scale, interrelated conditions have affected the airline industry over the past several years in such a manner that every carrier has had to respond in order to remain viable and competitive.
Air travel has grown in the past decade. Travel grew strongly for both leisure and business purposes. India will have nearly 800 to 1000 airplanes by 2023, it was estimated by Airbus. In spite of growth between 30 to 50 per cent in Indian aviation industry, losses of approximately 2200 crore is estimated for the current year.
1- Issues The main issue of this case is the lack of profits of the airline industry, an industry that should be more than profitable due to the large amount of customers, the necessity of using airlines’ services and the high prices charged by most of these airlines. What we are going to deal with is, why is this happening? And how is American airlines dealing with this problem?. To be able to discuss how American airlines wants to regain profitability, we must identify and analyse different issues such as, the company’s background, the airline industry as a whole, the demand for air travel, the marketing strategies, the distribution systems, pricing policies etc.
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.
This will lead to the limitations on the number of routes the international carriers fly, flight schedules, fares, etc. The past five years witnessed an increase in the cost of fuel, leading many airlines into bankruptcies, which resulted in consequences such as the $30 billion loss faced by the US airline industry as estimated by the US Airport Transport Association. One of the major political factor of globalization that affected airline industry was 9/11. In order to deter future terrorist threats, several security rules and regulations were enforced, which led to the increased cost of aviation operators to administer the fundamental training and personnel to follow these rules. Additionally, the post 9/11 period saw a decline in passenger and consumer requirements, negatively affecting the airline profits. There was a revenue drop of dollar 22 billion and three years were taken to recover them. But these revenues were dropped by 14% during the global financial crisis during the years 2008 and 2009, which was reclaimed to a large extend in the following year. The 9/11 period brought forward a huge global impact such as decline in traffic, revenues and profitability, increase in oil price and bankruptcies,