The Airline Industry

Paper Summary:

This paper explains that the airline industry remains on the brink of bankruptcy because of 9/11, the dramatic increase in the costs of fuel and increased security costs, which has led to the discretionary control of the airline industry by the Air Transportation Stabilization Board. The author points out that many U.S. airlines have formed international alliances to the benefit of the airlines and their customers; however, these airlines have not experienced a tremendous amount of growth in the last decade. The paper relates that the smaller, more regional airlines, such as Southwest Airlines and the no-frill airline Jet Blue, have developed strategies, which have increased their profits and competitiveness and have been copied by other U.S. and international airlines.

From the Paper:

"Southwest's success suggests that it can. JetBlue simply needs to focus on those things that separate it from the competition. While Southwest focused on affordability, JetBlue focuses on reliability. JetBlue has an operational recovery system, which allows planners to select goals before rerouting planes. "The software produces a solution and calculates its costs," after factoring in a plane's maintenance and fuel needs, the experience and availability of the flight crew, and FAA rules. The software will allow JetBlue to move into more markets without losing its reliability edge."

Sample of Sources Used:

• Airline Forecasts. "Why Analyze Airline Strategy?" AirlineForecasts.com. 2004. Airline Forecasts LLC. 7 Mar. 2006 http://www.airlineforecasts.com/Whyanalyzestrategy.html
• The Associated Press. "United's Discount Airline Strategy Faces Skeptism." USAToday.com.2003. USA Today. 7 Mar. 2006 http://www.usatoday.com/travel/news/2003/2003-02-17-ual-starfish.htm
• Byrnes, Jonathan. "Airline Deregulation: Lessons for Telecom." Harvard Business School:Working Knowledge for Business Leaders. 2004. Harvard University. 7 Mar. 2006http://hbswk.hbs.edu/item.jhtml?id=4173&t=dispatch
• Salter, C. "And Now the Hard Part." Fast Company. 2004. Mansueto Ventures LLC. 7 Mar. 2006 http://www.fastcompany.com/magazine/82/jetblue.html
• Southwest Airlines. "We Weren't Just Airborne Yesterday." Southwest.com. 2004. Southwest Airlines. 7 Mar. 2006 http://southwest.com/about_swa/airborne.html

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