Strategy and Case Analysis of us Airilines

Question: Discuss about the Strategy and Case Analysis of us Airilines. Answer: Introduction In this study, we will discuss about the US Airlines Industry and the problems faced by the US airlines regarding the changes take place in the airlines industry. We can observe that the US Airlines Industry had to face many problems to make the profit. There are other airlines also who has faced the same thing like Southwest airlines, jet blue, AirTran airways, virgin America. This was happened due to the cheap airways available in the domestic market. The other factors that have acted as a barrier in making profits are new entrants, who brought new techniques and policies to enter into the market. The cost of the labor in airlines industry is also very high as they demand highly paid. The major drawback for the US airline industry is the competition in the prices of the tickets. The rise of the internet websites and travel sites like Travelocity, Expedia, Orbits, etc. help the customer to compare the price of all the flights. This results in the upliftment of flights that provide c heap tickets. US airlines also faced the problems regarding the higher oil prices that create more complications. In 2013, the cost of the fuel has accounted for 32 % of all the revenues earned by the company. The labor cost has accounted for 26 % in the same year which is the second major cost of the production for the US airlines. These are the two reasons due to which many of the airline industries were announced bankrupt. This airline includes US airways, delta, northwest and united. Only the larger airlines were remained survived. In 2013, the US airways had pushed for the merger with the American airline that takes place under a negotiation. The US Airlines Industry: An overview US airway is one of the major and most popular airways of the United States of America. This airline is ceasing to operate in an independent manner starting from the year 1937, when the Federal Aviation Administration granted them permission and a certificate of (SOC) Single Operating Certificate and an American airline on the 8th of April, 2015. It was merged successfully with the America airlines in the year 2015 with all of the operations related to the bookings, reservations systems, etc. There are many systems that are not merged yet. US Airlines has many types of national and international networks with more than 193 destinations of the world. It is dealing with more than 24 countries in the present time that includes Europe, North America, South America, the Middle East, etc. This airline company is a member of star alliance and also a member of Oneworld in the year 2014. In 2013, the cost of the fuel has accounted for 32 % of all the revenues earned by the company. The labor cost has accounted for 26 % in the same year which is the second major cost of the production for the US airlines. US airlines has a fleet of more than 343 Jetcraft of main line, 278 jet that operates regional, turbo prop aircrafts, etc. these aircrafts are operated through the contracts and subsidiary airways under the name of US airlines Express via the code sharing. Porters five forces analysis of US Airlines Industry in the United States It is a type of methodology that helps the organization to analyze the internal and external environment of the industry in which the business organization operates. The key aspect of the porters five forces model helps the US airline industry in understanding all the external affairs that impact the performance of the company. for example declining the traffic of the passenger, increase in the operating expenses , the high prices of fuel, the greater landing and maintenance cost of the airlines, etc. the other threats are the cut throat competition in the airline industry that has affect the airline industry up to a large extent (Javalgi, and Steven White, 2002). Supplier power If we talk about the airlines industry then the power of supplier is very strong as there are three major elements that are required in this industry that are fuel, labor and aircraft. These all element are affected by the external environment of the industry and market. The price of oil is fluctuated o the basis of price of aviation oil price. It takes place due to the geopolitical and other factors of any country in which the airlines industry lies. The labor are also refers the power of union as they reflect their bargaining power through unity. It helps the labor to get the costly and unreasonable concessions from the US airlines (Weatherford, and Plt, 2002). Thirdly, the US and other airlines need two biggies and airbus and Boeing to manage the airlines. These are the reasons due to which the power of the suppliers the airlines industry is very strong. Buyer power As the technology is changing, the fliers and passengers do not have to rely on the mediators, agents, intermediaries, and distribution systems. They book the tickets for themselves using online bookings. From the past years, there are entry of lots of low cost carriers that results in cheap airlines and it benefitted the fliers up to a large extent. There is a need to understand the power of the buyers. There are lots of rules and regulation made by the authority for the benefits of the customers and buyers. These all element provides power to the customers and buyers. According to the porters five force model, the power of the buyers is moderate to high. The buyers also have lots of options and channels available for them in the market (Goetz, 2002). Entry and exit barriers The entry in the airline industry is not easy as the firms required a huge amount of capital for the investments in the airline industry. Even the exit of the airlines industries are very difficult as they have to write down and absorb many types of losses. From the above mentioned points we can judge that the entry and exit of the firms is not a barrier for the US airlines. There is a requirement of high infusion of investments and capital which is not as easy task to the industrialist. The exit procedure for the airlines industries is also very complex and involve in many types of rules and regulations (Tang, Zimmerman, and Nelson, 2009). Threat of substitutes and complementary The US airlines industry do not have any threats from the substitutes and complementary as the people of US do not choose to travel from train or buses for the journeys. It is noticed that flying is a type of natural phenomenon for all the passengers of US. Hence the substitutes available in the market do not create any threat for the US airlines. The benefits provided by the airlines are meals, Wi-Fi, amenities, and many other services (Morgan, Pritchard, and Pride, 2011). Competitive rivalry As mentioned in the above point, there is a huge competition in the firms and industries of airlines. There are many local airlines that provide cheap tickets that create competition in the airlines market. The low cost carriers give direct competition to the US airlines. Economic performance The airlines industry should focus on the needs and wants of the customers. There must be some brand differentiation and the sales should be related to the customer centric sale so that the customers will remain satisfied and do not switch to other companies due to the dissatisfaction. Providing best quality services to the customers is key source to increase the profitability of the US airlines. As we know that there are many complexities due to which the airlines are unable to earn profits. So, there is a need of unique solutions that can help the industry in earning a reasonable amount of profits. It can be done through analyzing the new findings related to the potential of revenue and sales earning. It can also be achieved through loyalty in the growth and development of airlines industry. The company should analyze the problems that lead in the low revenues and no profits (Morrish, and Hamilton, 2002). The airlines industries are facing a major challenge with regarding to its data to the customer, retailing and personalization. The major airlines have benefits of market share and potential in the profits. we can observes that despite of earning profit and revenue, the airlines industries are facing a struggling period in turning the demand into the profit and revenue. The US airline is facing a huge amount of competition due to the small and domestic airlines in the markets of Unites states of America. To increase the market share in the US markets in the airlines industry is not a very difficult task as it requires certain changes that should be effectively implemented in the business organization. As we can see that the number of passengers is increasing day by day that result in the top-line growth in the profits and revenues for the airlines industry. The customers want to have flights on cheap rates due to the frequent traveling using airways. If the companies provide premium services to the customers in the airlines, than no passenger will deny traveling with the US airways due to the unique features and services. To reach to such level, US airways have to deliver a high quality service and collective value to their customers (Oum, et.al. 2004). Strategies for airlines profitability To make a unique position in the markets of airlines industry, it is very relevant to provide different experience to the customers. It can be done through personalized services and delivering values to each and every individual related to the US airways (Birdsong, 2015). the other techniques that can help the US airlines is to blast the customers with the offers and discounts, packages, etc using technology and social media like messages, watsapp, Facebook, emails, etc. many types of offers are there like offers of upscale and offers of down sale that must be delivered to the customers. In airline industry, ales and services are two things that are interred related to each other (Mahutga, et.al. 2010). Using technology that is updated in nature is another option to increase the sales and revenue of US airways. It can be personalization of services, consistency, services experiences, and Omni-stage sales. These days the trend is to deliver personalized consumer-centric retailing which is very effective in nature. The rise of the internet websites and travel sites like Travelocity, Expedia, Orbits, etc. help the customer to compare the price of all the flights. This results in the upliftment of flights that provide cheap tickets. So there is a need to manage the prices of the flights to increase the sale and revenues of US airlines (Francis, et.al. 2006). Using customer focused techniques whose aim is to fulfill the demand of the customers only is also a way to increase the revenue and profits. The highly earning and profitable airlines industries are using these techniques as they are very effective in nature. Many CEOs of big companies believes that the companies should adopt futuristic strategies and customer based services to attract more customers. There must be concrete plans that are related to the satisfaction of the customers (Oum, Yu, and Zhang, 2001). The above written techniques will help US airways to transform the fewer amounts of revenues into a good amount of revenues. They will impact the entire organization, its talent, organizational structure; process of the business, use of technology, etc. if all the points are effectively executed in the organization, then it will influence the entire operations and result in positive revenues and profit margin (Czipura, and Jolly, 2007). US airlines will be able to gain the loyalty of the customers, potential customers for the future, better operations in the internal and external business organization, and better performance of the functions, lower the cost of production and finally the revenues and profits can be increased. These are the unique solutions that can help the industry in earning a reasonable amount of profits. It can be done through analyzing the new findings related to the potential of revenue and sales earning. It can also be achieved through loyalty in the growth and development of airlines industry. The company should analyze the problems that lead in the low revenues and no profits (Chermack, and Kasshanna, 2007). Some facts that will let us know more about US airlines In recent times, the US airlines had faced drastic changes due to the dire warnings from the World Bank, the International Monetary Fund and for many others European countries and many other global economies. US carriers are still surviving in such challenging situations. The biggest reason is that the US airlines do not affect themselves due to the adverse affects of the economy as they claim good earnings after the year 2012. In the last quarter of December, 2012, the fuel prices were increased that has created a burden on the all airlines industries of the world. Despite of all the above, the US airlines have a good amount of passengers and demand for the tickets. It helps the US airlines to survive in the critical situations (Buhalis, 2004). They said that they do not have any kind of slowdown in the travelling not even in the transatlantic markets. If we compare the other airlines industries of the world, the US airlines is the one that is protected by the international challenge and exposures. The reason is they earn their 60 % of the earnings from the domestic market of US. In contrast to this, the Singapore airlines is earning its 00 % of the revenue from the international destinations (Amernic, and Craig, 2004). We can observe that the US airline is financially strong these days due to the drastic transformation takes place in the past years and in mid -2000s. The year 2012 has brought good times for the US airlines that can be reflected easily (Amankwah?Amoah, and Debrah, 2011). Conclusion At last we can conclude that all the organization must adopt some good policies and strategies to have a smooth working in the business organization. We have also studied about the economic performance of the company in the UK markets. As we know that there is a vast competition in the airlines industry due to the presence of many companies in the airlines industry. This is the reason due to which US airlines is facing problems in earning profits. The present report helped us to understand the strategies and policies that must be adopt by the US airlines to earn profits. The students learnt about the US airlines in details as this report comprises of all the relevant data regarding the same company to give an overview. The above written techniques will help US airways to transform the fewer amounts of revenues into a good amount of revenues. They will impact the entire organization, its talent, organizational structure; process of the business, use of technology, etc. It is very rele vant to provide different experience to the customers. It can be done through personalized services and delivering values to each and every individual related to the US airways. Hence it becomes very relevant to study the national, international, economic, non economic environment of the market in which the US airlines is dealing. It helps the business organization to design and customize its functions and operations according to the needs and wants of the customers a well the current trends of the market place. US airlines had faced any problems due to which they have made drastic changes to keep running the business. In this way, they are surviving in this challenging and competitive world. References Amankwah?Amoah, J. and Debrah, Y.A., 2011. The evolution of alliances in the global airline industry: A review of the African experience. Thunderbird International Business Review, 53(1), pp.37-50. Amernic, J.H. and Craig, R.J., 2004. 9/11 in the service of corporate rhetoric: Southwest Airlines 2001 letter to shareholders. Journal of Communication Inquiry, 28(4), pp.325-341. Birdsong, D., 2015. 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