Deregulation of the U.S. airline industry has resulted in ticket prices dropping by a third, on an inflation-adjusted basis. As a result some 1.6 million people fly on 4,000 aircraft every day. Airlines carried 643 million passengers in 1998, a 25% increase over 1993 and the FAA estimates that the nation¡¦s airline system will have to accommodate 917 million passengers by the year 2008. The growth in air travel threatens to overwhelm the presently inadequate air traffic control system, which has not kept pace with available technology in navigation, communications, and flight surveillance. Much of the equipment used for air traffic control today is based on fifty-year-old technology; for example, analog simplex voice links for communications and ground-based radar for surveillance, and VHF Omnidirectional Range/Distance Measuring Equipment (VOR/DME) for navigation. The lack of system automation imposes heavy workloads on human air traffic controllers and increases the risk of accidents in heavy traffic situations.
Capacity limits are being reached in both airports and airspace, with congestion delays in departure and arrival schedules reaching record numbers. Funds to upgrade the air traffic control system are available in the trust fund created to receive the tax applied to airline passenger tickets and the tax on fuel for general aviation. The General Accounting Office says modernizing the air traffic control system will cost at least 17 billion for just the first 5 years of the FAA¡¦s 15-year National Airspace System improvement plan. It is the NAS that provides the services and infrastructure for air transportation. Air transportation represents 6% of the Nation¡¦s gross domestic product, so the NAS is a critical element of our national economy.
Given the size of the NAS, the task ahead is enormous. Our NAS includes more than 18,300 airports, 21 air route traffic control centers, over 460 air traffic control towers and 75 flight service stations, and approximately 4,500 air navigation facilities. The NAS spans the country, extends into the oceans, and interfaces with neighboring air traffic control systems for international flights. The NAS relies on approximately 30,000 FAA employees to provide air traffic control, flight service, security, and field maintenance services. More than 616,000...
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...ement, and subject to a conflict of interest between safety regulation and ATC operations. They believe the United States should follow the example of Britain, Germany, Switzerland and most recently, Canada, in fundamentally restructuring air traffic control. It is their opinion that a not-for-profit user-controlled, user-funded corporation is the best way to address the ATC system¡¦s fundamental problems.
We find ourselves with a system that currently runs on obsolete and failure-prone equipment such as 1960s mainframe computers, equipment dependent on vacuum tubes, and radar between twenty and thirty years old. The FAA maintains safety margins by artificially increasing the spacing between flights, imposing ground holds and using other techniques that reduce system capacity. The airlines alone waste $3 billion a year in fuel and crew time due to the delays. Wasted passenger time is estimated at several billion dollars more. The FAA¡¦s National Airspace System Architecture Version 4.0 looks very impressive on paper, but given their track record in regards to modernization, maybe we should be looking at alternatives to a thinly stretched bureaucracy.
The objective of this research report is to provide a thorough analysis of Alaska Airlines. In order to do this we chose to compare a similar company against them. The company in comparison is Spirit Airlines. Both companies compete in the same type of business through airline transportation. Many of their services include; security, safety, transportation of passengers as well as luggage, ensuring vehicle safety while in transit, concierge services, providing entertainment aboard plane, checking weather conditions prior to flight, and much more. All of the data gathered for this report was obtained from the company’s 10-k filings with the SEC.
whether or not that city had enough gates for the new carrier, and whether the
Denver International Airport Construction and Operating Costs. (1997, July 5).University of Colorado Boulder. Retrieved April 28, 2011, from http://www.colorado.edu/libraries/govpubs/dia.htm
In today's competitive marketplace, all firms are seeking ways to improve their overall performance. One such method of improvement, recently adopted by many firms, is benchmarking. Benchmarking is a technique used to evaluate internal business processes. "In this analysis, managers determine the firm's critical processes and outputs, baseline those processes, then compare the performance of each process against a standard outside the industry" (Bounds, Yorks, Adams, & Ranney 1994). To effectively improve a business process to world-class quality, managers must find a firm that is recognized as a global leader, not just the industry standard. Successful benchmarking requires tailor-made solutions, not just blind copying of another organization. Measurement and interpretation of data collected is the key to creating business process solutions.
The results of airline deregulation speak for themselves. Since the government got out of the airline business, not only has there been a drop in prices and an increase in routes, there has also been a remarkable increase in airline service and safety. Airline deregulation should be seen as the crowning jewel of a federal de-regulatory emphasis. Prices are down: Airline ticket prices have fallen 40% since 1978. Flights are up: The number of annual departures is up from 5 million in 1978 to 8.2 million in 1997. Flights are safer: Before deregulation, there was one fatal accident per 830,000 flights, now the rate is one per 1.4 million flights. So what's the problem?
According to the International Air Transport Association, 2001 was only the second year in the history of civil aviation in which international traffic declined. Overall, it is believed that the IATA membership of airlines collectively lost more than US$12 billion during this time (Dixon, 2002).
As airline industry is a competitive marketplace, the airline companies use new technologies to improve their efficiency and decrease the overhead costs, including ‘advanced aircraft engine technology, IT solutions, and mobile technology’ (Cederholm 2014). The technology changes including technology improvement, new innovation and disruptive technology. The disruptive technology need to meet the characteristics of ‘simplicity, convenience, accessibility and affordability’ (Christensen 1995). The technology changes would bring both opportunities and threats to airline companies. Since Labour cost and fuel costs occupy 50% of most airlines operating cost (Groot 2014). Therefore, if new technologies could be disruptive in the two aspects, there will be important changes to current airline
Before we discuss government intervention and its affect on an industry’s competition we must first seek to understand the five forces framework. The theory, discussed in 1979 by Micheal Porter seeks to evaluate the attractiveness of an industry. Throughout this essay I will explore the theory and then relate government action and its well-documented affects on the airline industry.
The purpose of this report is to identify whether Automatic Dependence Surveillance Broadcast (ADS-B) or Traffic Alert and Collision Avoidance System (TCAS II) should be placed in all aircraft if the FAA decides that there is a need for some collision avoidance technology to be required for all aircraft. TCAS is currently required on all commercial passenger aircraft over 30 seats and ADS-B is currently being tested.
...ncrease its power and to continue to develop new technology to make aviation more efficient and safe. The FAA's future program is call NextGen. This program is designed to create new technologies that can help take advantage of new technology to help make aircraft more modern and easier to fly, and it also helps create more routes airplanes can take and make their existing routes more efficient. The FAA is also trying to help make the aircraft industry very flexible and be able to meet many different needs, and the FAA is also trying to lower costs, improve service and create better security measures to help the aviation industry in the United States be the best in the world. Since its creation 50 years ago the FAA has become a very important part of the United States. It has created one of the most reliable and efficient transportation system in the world.
“Northwest Airlines is engaged principally in the commercial transportation of passengers and cargo.” (5) NWA is a complete full service air transportation carrier that is the forth-largest air carrier in the world that services over 750 destinations located in 120 different countries on 6 continents. They operate 2,600 flights daily around the world and operate more than 200 nonstop between the United States and Asia each week. Headquarters is based in Minneapolis/St. Paul. The main connecting hubs are located at Detroit, Minneapolis, Memphis, and Tokyo. Northwest employs 50,600 employees nationwide as of Dec. 31, 1998. (6) NWA also has 1269 Stockholders as of Feb. 26, 1999. (6) Northwest continues to improve cargo shipping by proudly dedicating 12 Boeing 747 aircraft and easily becoming one of the largest cargo airlines in the world. (4) Cargo is very profitable for Northwest because “Northwest has predicted cargo revenue will top the 900 million mark in 2000”. (3) The enormous fleet of aircraft contains 400 airplanes. (1) Northwest has subsidiaries wholly owned (Unless otherwise indicated by NWA) by Northwest Aircraft, Northwest Aerospace Training corps, MLT Inc, Express Airlines, and Express Airlines I. (6)
Topic A (oligopoly) - "The ' An oligopoly is defined as "a market structure in which only a few sellers offer similar or identical products" (Gans, King and Mankiw 1999, pp.-334). Since there are only a few sellers, the actions of any one firm in an oligopolistic market can have a large impact on the profits of all the other firms. Due to this, all the firms in an oligopolistic market are interdependent on one another. This relationship between the few sellers is what differentiates oligopolies from perfect competition and monopolies.
Airline and travel industry profitability has been strapped by a series of events starting with a recession in business travel after the dotcom bust, followed by 9/11, the SARS epidemic, the Iraq wars, rising aviation turbine fuel prices, and the challenge from low-cost carriers. (Narayan Pandit, 2005) The fallout from rising fuel prices has been so extreme that any efficiency gains that airlines attempted to make could not make up for structural problems where labor costs remained high and low cost competition had continued to drive down yields or average fares at leading hub airports. In the last decade, US airlines alone had a yearly average of net losses of $9.1 billion (Coombs, 2011).
The main opportunities that the scheduled air transportation will have in the next five years are the possible decrease of TSA agents at airports, technology increasing the safety and comfort of the flights for the passengers and ...
Market segmentation means dividing the market into distinct groups that have common needs and will respond similarly to marketing action. Each segment must be unique, have common needs, and respond in a similar manner to marketing efforts. Target market is the group of potential customer that has been selected by business to focus its marketing efforts towards. This is the group the business wants to sell its products/services to. Positioning refers to the image created in the minds of customer of its product or brand. It is a perception created in the minds of the consumer relative to that of its competitors.