Air Canada outsourced 95% of their IT services to multiple suppliers. This caused problems to the airline because if there is any problem with the outsourced system, it cannot be solved quickly. To deal with this problem, Air Canada assigned IBM to act as an integrator in which they had to integrate new applications with the existing applications. Even if IBM acted has an integrator, they were unable to fix major problems quickly. Some problems were very complicated to be identified which depends on the number of vendors involved in developing the system.
If airport passenger screening is privatized the screening performance would most likely be enhanced by decreasing management issues and allowing for adaptable budgeting. Due to the mismanagement of the TSA the amount of disturbance that air travelers are subjected to is tremendous. Operational mismanagement has been a part of the TSA since its inception; which distracts the agency from operating at its full potential for increasing aviation security. During an audit of a large American international airport, screeners missed 45 of the 75 bomb materials that were packed into carry-ons (Thomas 2). The ineffectiveness of the administration creates a hostile relationship between the agents and the passengers.
Segmentation makes the way easy for United Airlines to grow and expand, because UA uses segmentation to target those groups of customers whom it finds an opportunity to develop. Segmentation enables United Airlines to identify opportunities in the market, achieve marketing objectives and maximize the efficiency of marketing efforts by using a different strategy for each segment. Segmentation also gives the company a better understanding of its clients, the services they need and the methods of payments. In addition to that, it helps to achieve a successful targeting. For example when united airlines chooses the right variables and does a proper market search for market segmentation it will be able to select one or more segments that it will serve profitably as well as easily.
Their key-idea is diversification, which Southwest Airlines is achieving by offering more products to more customers in the industry in the efforts of attempting to dominate the overall market share (Bradley, J., 2017). Functional strategy: Southwest Airlines is a passenger airline providing scheduled air transportation in United States and internationally. In Southwest Airlines functional structure with three layers of management, where the upper-management makes all the decisions, which gives them complete power over the company, as well as a clear career trajectory for the Southwest employees. The functional structure is providing stability and efficiency but, on the other hand, could also have a disadvantage if the communications between the departments and the upper management are not functioning (Southwest,2018).
Southwest Airlines is competing against other airline companies for customers. That is why it is essential that Southwest Airlines enforces strategies that allows them to outperform other airline companies. This gives them a competitive advantage, which is defined in the textbook as the achieved advantage over rivals when a company’s profitability is greater than the average profitability of firms in its industry. (Hill, Schilling, & Jones, 2017) The higher the profitability levels are of Southwest Airlines along with the higher the profit growth of Southwest Airlines when compared to other airline companies, will see if they have a competitive advantage over their rival competitors. In order to have high profitability levels than their competitors,
It occurs around every 6 years and requires several months in a hangar. Failure to maintain a plane have dire consequences from license revoke to loss of lives. Hence, aircraft maintenance schedule is an important factor to reflect in airline scheduling process. 4.2 General Crewing Availability Crews are very essential in managing and handling aircraft operations both in air and on land.Scheduling the availability of crews is therefore very important as without the crew , the aircraft might not be safe ,might not be ready or delay in aircraft departure. One constraint of crew availability is the long-haul crewing constraint.
Competitiveness Airports operate in a highly competitive environment and therefore encourage developments which make the airport sector more responsive to the needs of their passenger and airline customers. Competition in the airline sector has been a driver of innovation and cost reduction and has delivered major benefits for consumers in terms of increased choice and value. Effective competition between airports is clearly something to be encouraged for the same reasons. “Within the aviation industry, MRO, ground handling, catering, CRS and freight forwarding created economic profits, but these were much more than offset by economic losses by airlines and airports. Airlines were responsible for the large USD17 billion of economic losses globally.
On the other hand countries have put measures in place such as strict visa policies and border controls in an effort to combat terrorism attacks. Economic Environment Factors such as Crude oil prices, aircraft prices, Economies of Scale may also have effect on the airline industry. Social Environment Tourists and Business travellers contribute to the growth of the airline industry. Technological The use of modern technology by the airline manufacturers can contribute significantly to the growth of the
Nok Air has two major hubs located in Don Mueang international airport, which is a central domestic airport, and in Chiang Mai. A key competitive advantage that leads Nok Air to be the top budget domestic airline and to gain higher market share is using the product differentiation. Nok Air differentiates itself from other competitors in terms of routes and periods. The firm offers a variety of routes and periods to passengers to enjoy with Nok Air compared to other competitors in the market of low-cost airline. Expanding flying route is one of the firm’s strategies to serve more passengers.