Piedmont Airlines Case Study Essay

Southwest Airlines is a company that is known for its low ticket prices and profitability despite the highly risky industry in which it operates. This essay examines the cost behavior, cost volume profit (CVP), activity based costing (ABC), budgeting process, costing and decision making policies of the firm. The essay will discuss how the airline integrates these concepts in its daily operations.

MSP has more than enough runways with the four runways to support even the most

The airline industry has long attempted to segment the air travel market in order to effectively target its constituents. The classic airline model consists of First Class, Business Class and Economy, and the demographics that make up the classes have both similarities and differences to the other classes. For instance there may be similarities between business class travellers on a particular flight, but they will not all be travelling for the same reason. An almost-universal characteristic of air travel is that customers do not fly for the sake of flying; the destination is the important element and the travel is a by-product, a means-to-an-end that involves the necessity of an aircraft that gets the customer from point A to point B.

How has SWA (a) responded to the “Shuttle By United” initiative (half page 5 points); and (b) what assessments can be made about SWA’s market and financial position on competitive routes based on 1994 4th quarter results (half page 5 points)?

The purpose of this memorandum is to address the profitability issues at Continental Airlines and to estimate the costs for 2009 to forecast the future outlook of the company. To address these issues, I used regression analysis to observe what effect the 11% reduction in flying capacity would have on the firm’s future operating costs. I also used the results from the regression analysis to verify the costs that, if reduced, would further comply with the implementation of cost-cutting initiatives and operational efficiencies that the company is striving for. Lastly, I consolidated the data to forecast Continental’s financial outlook for 2009, then provided insight

Delta airline is one clear example as it is the latest one to make use of the chapter 11. The remaining of this paper will be talking about the different forecasting methods used by the airline industry to make future prediction of passenger demand. The exactness of forecasts is very critical to the revenue management system as lousy prediction of demand can lead to an incorrect decision-making, which in turn leads to a miserable revenue performance. So the airline industry, more than any other industry, needs an accurate forecasting not only because of the September 11 occurrence, but also due to a very high price of crude oil, which tends to increase the price of kerosene highly used by the industry. One study identified as the Improved Forecast Accuracy in Airline Revenue Management (2001, Richard Zeni) shows that airlines divide passengers into two large categories based on their sensitivity to price and travel needs. These included business passengers and leisure passengers. This study has further shown that business travelers have a tendency to make their arrangements close to their departure date staying at their destination for only a short time. However, they did not show much flexibility on their plans at all, but they were willingly to pay more money for their tickets. On the other hand, exactly the opposite happened with leisure travelers. They usually booked their flights well ahead of their travel date; stayed more time

Southwest has lately received several negative comments due to overbooking of flights on social media. This has caused the business to lose many loyal customers that always was driven by Southwest on-time arrival and departures times. My priority as the vice president is to accommodate my customers to make sure they are always satisfied with this airline. Nevertheless, making sure that these negative comments won’t affect Southwest in any shape or form. My plan to change this weakness and make it into a strength is to have extra planes available in case it occurs again. I will guarantee that we will improve the technology at booking flights in our end to make sure that flights and never over booked. There will be numerous of market research and planning to structure a plan that can improve this weakness. Also, accommodating customers with free incentives if this occurs to make sure they continue to be satisfied with Southwest airlines. Our goal is to excite, educate, help experience, and engage our customers to a great involvement of different conveniences to make sure that negative comments won’t affect our business.

There have been few inventions to change how people live and experience the world considerably as the creation of the airplane. Today, traveling by air has become the norm and it would be difficult to imagine life without it. Air travel has improved the way people are able to conduct business by shortening travel time and changing their thought of distance. The companies within the airline industry exist in a very competitive market. One of those companies, Southwest Airlines, features low-fare, no-frills air service with frequent flights of mostly short routes. Costs are kept down by the exclusive use of Boeing 737 aircraft, which allows for low maintenance costs and quicker turnaround times for flights, and by an emphasis on ticketless travel (Encyclopedia Britannica). This paper will address two segments of the general environment and how they affect Southwest and the airline industry; evaluate how Southwest has addressed two forces of competition; predict what Southwest might do to improve its ability to addresses these forces; assess the external threats affecting Southwest; discuss Southwest’s greatest strengths and most significant weaknesses; determine Southwest’s resources, capabilities, and core competencies; and analyze their value chain.

In April 2017, United Airlines experienced its most controversial Public relations crisis ever experience that shocked the nation. The incident occurred on United Airlines Flight 3411, when a passenger was assaulted and forcefully taken off a plane for a seat he paid form. The occurrence was captured on video and watched from all over the world. The way United Airlines and CEO handled the dispute was criticized all over the world. Many people questioned the ethics, moral and the timely manner in the way the business answered to the public. This sparked a pandemonium in the relationship between customers and airlines, and the way customers are treated in an unethical matter, in this case United Airlines and the treatment of Dr. David Dao.

United Airlines is the most significant airline in the U.S. It has thousands of daily trips around America. However, passengers find many issues on their flights at first class. Unfortunately, complaints against airlines in the U.S. soared 70%. There are many problems happen before and during flights with passengers, such as poor services for passengers, bad quality of food, uncomfortable seats, and delay of baggage when the flight arrives.

To Increment total revenue and in an effort to better match the ordinant dictation for each flight with its Capacity, airlines offer a variety of fare products at different price levels for the same Flight (differential pricing). Much of the rationale for price differentiation prevarications not in Discrimination but rather in the different costs of accommodating passengers associated with Different requisites. A leisure peregrinator who is inclined to book well ahead when seats are more yarely available is less sumptuous to accommodate than a business peregrinator who demands

This case study on South West Airlines portrays how the company operates differently compared to the other companies within the U.S.A aviation industry. Southwest airline has indulged in activities that can only be. The strategies or tactics used by Southwest airline have challenged the big companies and enveloped on their market share. It is evident that Southwest airline has decided to try a different approach and models that have worked to their advantage (Gittell (2003), p.17). For instance, the company has deliberately foregone the commonly used ‘hub and spoke’ model and instead adopted the ‘point to point’ model. More importantly, the company deliberately aims in attracting commuters from other forms of transport such as road and railway, seeing them major competitors as well.

Delta airline is one of the biggest competitors in the air traveling market, transporting an estimated 160 million travelers a year to their destinations according to delta. Delta airline was created in 1924 originally a crop dusting company eventually evolved to a airline which started to transport actual passengers in 1929. Delta had a prosperous business up until it faced bankruptcy on April 25, 2007 thus forcing the company to merge with Northwest airlines. Delta is making hundreds of millions a year and a household name when it comes to air travel but this was only possible through the countless merging of other airline companies. All this suffered tremendous scrutiny just a day after the U.S senate held a hearing for the industry’s poor customer service and harsh criticism of airline fees when a passenger was dragged off the overbooked plane. The passenger suffered a concussion and a broken nose. Delta has since then been publicly shamed for such poor customer treatment through multiple news outlets covering this story in a negative light and multiple videos posted on youtube with millions of view each. The man being dragged off the plane is just one of the multiple incidents where passengers were physically dealt with by airport employees and discrimination has been reported, as a result market appeal plummeted leading to suffering sales as of recently. Despite the public apology made by the company the company is suffering due to its unwillingness to change and

In the business market it is clear to see that this market aims at providing a premium service which include luxuries, for example the use of airport lounges and bigger seats on the aircraft and people are willing to pay extra money for these luxuries. It is possible to assume that in times of recession and rising fuel costs that pricier seats, such as the seats in business and first class, would be less popular and harder to sell but that does not seem to be the case. IATA estimated that average ticket costs for business class flights have risen 8 percent in the first half of 2010. Business travellers make up 8 percent of overall passenger numbers but contribute 27 percent of ticket revenue, IATA said in its latest snapshot of the airline business. Premium travel has risen almost twice as far in percentage terms from its 2009 low as economy travel, but, such was the depth of the fall of the premium segment, current levels are still 10% below pre-recession peaks, whereas economy travel is now 5% above its pre-recession peak.

• $7.5 million to get the slots and it could generate this revenue from 8 flights operating daily