How to Effectively Manage an Airline

Paper Summary:

This paper looks at the best way to manage an airline. It shows that in the last two decades, the highs and lows in airline equity values were not associated with operational factors, but were the result of environmental factors external to operations. Effects of new technology are discussed, as well as the results of the change in attitude of consumers and government towards the airline industry. It looks at successful airlines and claims that their success is due to their market orientation. Effects on the industry since deregulation are looked at. The many risks with which an airline carrier manager must deal are also examined and the need for ongoing flexibility is stressed.

From the Paper:

"In the last two decades, the highs and lows in airline equity values were not associated with operational factors (strikes, competitive issues, loss of market share or an over leveraged situation), but were the result of environmental factors external to operations. Examples were the 1987 stock market collapse, the United Airlines takeover attempt, the Gulf War, and problems in Eastern Europe. These events have had immediate effects on costs including interest rates, energy prices and exchange rates, subsequently affecting the perceived profitability of the airline (Froot, Scharfstein and Stein, 1993)."

More papers on How to Effectively Manage an Airline:

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• Case Study # 52269 : "Aer Lingus and the Airline Industry"
• Research Paper # 58995 : "Deregulation of the Airline Industry"

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