"While a strike could paralyze Delta's second-largest hub at Cincinnati/Northern Kentucky International Airport, those who govern the airport's operation haven't yet drawn up a contingency plan for how they would handle the potential loss of most of its flights." (Collins & Dias, 2001) The company and the subsidiary were concerned that any additional cost in the form of pay and benefits would push them into bankruptcy
Last year the average Delta pilot earned $158,500." (Fonti, 2001) The final position had the Comair pilots returned to work as the highest paid and the best covered pilots in the industry and the final position of Delta was to agree and hope to hold off bankruptcy
S. However, globalization has impacted on the global travel culture, making airline travel more popular and increasingly seen as a normal model of travel, rather than remaining an uncommon mode, which was the case 30-40 years ago (Belobaba, Odoni, & Barnhart, 2009)
This commitment towards employees demonstrates the importance of the employment relationship, and supports the source of differentiation in terms of corporate culture and experience provided for passengers. It also helps to enhance the overall employment relationship, the commitments towards meeting the needs of individuals, equality, and providing an outward demonstration of appreciation for employees, all of which are aligned with the human relations school of thought associated with higher levels of motivation and staff performance (Buchanan & Huczynski, 2010)
Technology has, and continues, to have a significant impact on the airline. As Southwest has adopted the low cost carrier strategy, one of the underlying approaches has been to ensure that operating costs are controlled and value is created in the underlying systems (Gittell, 2005)
The airline has grown, but in recent years the airline industry has seen significant constraints on growth due to the maturity of the industry in the U.S. along with the economic influences constraining growth (IATA, 2014)
The airline has grown, but in recent years the airline industry has seen significant constraints on growth due to the maturity of the industry in the U.S. along with the economic influences constraining growth (IATA, 2014)
3.1 Application of the I/O Model The I/O model operates under the assumption that to gain superior profits a firm needs to examine the industry influences, looking to forces outside the organization, and leverage that information to identify suitable strategic choices (Lieberman & Asaba, 2006)
However, technology can also be seen as a constraint, especially as the firm outgrows it or the technology becomes dated; costly upgrades may be required to facilitate the growth; this was seen with the booking system, which was unable to cope with international bookings. With the acquisition of AirTran and the decision to expand with international flights, the former Amadeus system was insufficient, and the firm has had to invest in an upgrade (Maxon, 2014; Carey, 2014)
Marketing has also benefited from technology, with the use of the 'Ding' program, a small application that potential passengers could install, so they would be notified with a pop up screen when special fares were released (Southwest, 2014). Technology also plays an important role in the operations, it has recently been reported that the cockpit software in Southwest aircraft is being upgraded, which will create smoother landings for passengers and increase fuel efficiency (McCartney, 2014)
Business An Examination of Southwest Airlines Globalization and Technology Improving Returns Application of the I/O Model Application of the RBV Model Mission and Vision Statement Stakeholder Influences Southwest Airlines has been one of the aviation industry's success stories; founded in 1967 the airline pioneered the low cost carrier model, and grew organically leveraging a first mover advantage (Morrison, 2001)
The airline now operates approximately 3,600 flights every day, employees 45,009 staff and with the acquisition of AirTran in 2011 it became the largest domestic U.S. carrier (Southwest Airlines, 2014)
The political uncertainty in Eastern Europe, and the Middle East, is also heading a potential impact on demand, as well as operations. Fewer passengers are likely to travel to areas where there is political unrest, and airlines are increasingly diverting their aircraft away from aviation routes which fly over conflict areas, an issue which has come to the fore following the downing of the Malaysia airlines flight over the Ukraine in July 2014 (Walker, Salem, & Luhn, 2014)
The company demonstrated great skill and forethought in developing the best customer rated internet site among all the airlines, online in the Spring of 2000. (Gnuschke, 2000, p
." that "…provide new capabilities to different staff functions" (Ambrosio and Mitchell, 2013)
" that "…provide new capabilities to different staff functions" (Ambrosio and Mitchell, 2013). The Nature of Airline Cost Structures The airline industry's cost structures are drawn from the oligopolistic nature of i) the air travel market; and ii) the manufacturer market (Ben-Yosef, 2006)
For the last one decade, the airline has been using a revenue management approach consisting "of a combination of overbooking, allocating capacity among customer segments, and a differential pricing scheme for customer segments." Predominantly, the airline industry has made use of the leg/class control method, in which case "airlines establish a collection of products known as booking or fare classes that are designated by a single alphabet character" (Boyd and Bilegan, 2003)
The board regulated the industry's every move, determining all aspects, from M&As and alliance-formations to pricing, marketing, and entry/exit. The industry worked more like a legalized cartel (Cento, 2009)
This text will focus on the point-to-point and hub-and-spoke structures. Point-to-Point: in this framework, all passengers "board at flight origin and deplane at the destination," as depicted in fig 1 (Cook & Goodwin, 2008, p
, (2010) places the average load factor at 50% over the first half of the 1970s decade. However, by the beginning of 2008, the "average number of passengers on board a flight had greatly improved due to deregulation and the effects of competition in the industry," and the load factor had risen to 75% (Gildner, et al