Eastern Airlines Facing Bankruptcy
In 1986, Eastern Airlines was in desparate trouble. The fourth quarter of 1985 had shown a $67.4 million loss, and financially experts had told Frank Borman, president and chief executive officer, that the airline had three choices: 1) a 20 percent pay cut for all union and noncontract employees. 2) Filing for Chapter 11 (bankruptcy) or 3) Selling the airline. On February 23, 1986, Eastern's board of directors met to decide the fate of the company.
Frank Borman, quickly left his home in Coral Gables to Building 16 at Miami International Airport that Sunday evening, to discuss plans on saving the airlines. The board of directors had recessed for dinner following afternoon session and was scheduled to convene at 7:30 p.m. At the earlier meeting, Wayne Yeoman, senior vice president for finance, had spent most of the time outlining the details of Texas Air's offer to buy Eastern. Frank
Lorenzo and Frank Borman had been talking since December originally about consolidating the computerized reservation systems, then , as
Eastern's problems deepen, about a possible sale.
As Frank entered his office, he found his his loyal excutive assistant;
Wayne Yeoman; and Dick Magurno, Eastern's senior vice president for legal affairs. For about 20 minutes the three discussed the fourthcoming meeting and the prospects for saving the airline. Negotiations were going to come around for ALPA and TWU but no break from the IAM. The IAM would not budge since Charlie Byran, head of the machinist's union, stood firm against a 20 percent wage cut.
At 7:30 the board meeting began with the discussion of the Texas Air offer, concentrating on some of the conditions attached to the buying of the company. More talk and hours dragged on. Finally word got out that ALPA was nearing an agreement. The meeting recessed for an hour.
During the recess Frank needed to get Charlie's surport on the 20 percent pay cut, otherwise the company was going to sold. He told Charlie to come up to his office. Frank told Charlie, " we've been at this since 83' and you have to recognize it can't go on. I have every reason to believe that the pilots and flight attendants are going to give us what we need. I know it's more difficult for you because your contract is not open. But I know you have a sense of history. We have a very good opportunity to cure this airline, and if you just understand this, in the long run you'll come out a stronger, more admirable person. Choose the harder right instead of the easier wrong, and
and gain strength with all experiences that you go through. This is evident when Ulti...
Even though Southwest offers no-frills, there is still a high degree of customer satisfaction that continuously builds customer loyalty for the company. As mentioned, Southwest offers low prices on their airplane tickets. Also, Southwest is renowned in the airline industry for its short turnaround time on arrivals and departures. And since people's biggest concern nowadays is money and time, having low price airline tickets to cater their traveling needs in a shorter period of time will surely satisfy them. Moreover, aside from the low prices offered, what attracts to customers is Southwest’s way in dealing with them. The employees of the airline treat their customers well and really listen to their needs.
Northwest Airlines is one of the pioneers in the airline transportation industry and is ranked at the fourth largest air carrier in the United States today. The success of the carrier depends on the quality and reliability of the service at a reasonable price. Close competitors force Northwest to innovate their services by increasing efficiency. This essay will try to examine different perspectives in the services needed to successfully complete the company’s objectives. The analysis will explain historical and financial perspectives that may give a better understanding of the current market trend of the organization.
Southwest Airlines strategy of focusing on short haul passenger and providing rates as low as one third of their competitors, they have seen tremendous growth in the last decade. Market share for top city pairs on Southwest's schedule has reached 80% to 85%. Maintaining the largest fleet of 737's in the world and utilizing point-to-point versus the hub-and-spoke method of connection philosophy allowed Southwest to provide their service to more people at a lower cost. By putting the employee first, Southwest has found the key to success in the airline business. A happy worker is a more productive one as well as a better service provider. Southwest will continue to reserve their growth in the future by entering select markets only after careful market research.
It has stayed relevant to the market through its propelled philosophy of relationships to generate profits in the business. Since its establishment in Monroe, Louisiana the once tiny airline has stretched to greater heights serving in 6 continents. It has also established a distinguishable name among its competitors with a reputation of leading customer services. However, even as an established venture, the company needs to maximize its profits in order to stay in business and expand in to new territories beyond its conquered boundaries. A strategic analysis was carried out by our team to establish the company’s current situation. A SWOT analysis was performed to come up with three referenced, strategic alternatives. This alternatives are meant to act as a strategic guidance to the company in order to enhance growth. The strategic recommendation provided will improve and enable the business to cope with the competitors while the implementation of the strategy section will outline the way to go about achieving these alternatives in the business setting. Lastly, we put up a discussion on the evaluation procedures and necessary controls for the
Since the Jet Age, airlines have been entering and existing the airline industry. Some have been in business since the very beginning. For example, United airlines was founded almost twenty-five years before the jet age took off, and due to an incredible amount of money that the airline had by being one of the first airlines predating the Jet Age, was able to buy new jets and assert itself as one of THE giants of air travel by the late 1950’s. But the introduction of new technology paved the way for issues regarding externalities, and production of these new technologies. ("Assessing the external environment - Responding to a changing external business environment - United Airlines | United Airlines case studies and information | The Times 100", n.d., p. 1) The beginning of the Jet Age offered an intense opportunity for new firms to open or expand, producing new products from jet engines to structural parts, from radar technology, to reclining seats. According to research done by the Air Transportation Action Group, “It has been estimated the airline industry supports a grand total of 29 million jobs” (Hanlon, 2007, p. 1). This statistic proves how dependent the world is on the airline industry, for jobs and travel, as well as r...
The perennial crisis in the airline industry: Deregulation and innovation. Order No. 3351230, Claremont Graduate University). ProQuest Dissertations and Theses,, 662-n/a. Retrieved from http://search.proquest.com/docview/304861508?accountid=8364.
Southwest Airlines has come from an underdog to being one of the best airlines in the industry. This reputation translates from its strategic management of resources. The Co-founder and former CEO, Herb Kelleher, established a unique corporate culture that leads to high customer satisfaction, employees’ morale, and one of the most profitable airlines in the industry (Jackson et al., 2012). The corporate culture concentrates on empowerment the workforce. It shows through Southwest Airlines core values that “happy employees lead to happy customers, which create happy shareholders” (Jackson et al., 2012). Since its first grand opening in 1971, Southwest Airlines has shown steady growth, and now carries more passengers than any other low-cost carrier in the world (Wharton, 2010). To expand the business operations, Southwest Airlines took over AirTran in 2010 as a strategy to gain more market share for the Southeast region and international flights. However, the acquisition of AirTran brought upcoming challenges both internally and externally for Southwest Airlines. In this case analysis, the objectives are focusing on the change process post the merger with AirTran, and evaluating alternatives to address the impacts of the merger.
This is the number one fundamental life precept that you must understand, accept and be totally faithful to, if you're going to be happy and successful.
Several large scale, interrelated conditions have affected the airline industry over the past several years in such a manner that every carrier has had to respond in order to remain viable and competitive.
Flying thousands of feet up in the sky is a dream of many young children, but very few actually end up as a pilot when they grow up. Commercial airline pilots will always be needed, but many people do not even think about choosing this as a career. Pilots have extremely important jobs. They must fly people place to place with no problems while at the controls of thousands of pounds of metal and flammable fuel, not to mention the many passengers. A pilot’s job is very risky, but it is also very rewarding.
When an airline does not have a sustainable competitive advantage, it does not have any properties of differences from there competitor and turns to a dangerous price war. The sustainable ...
The stewardess then directed me towards the back, away from the cockpit. I looked at my ticket and at what seat I'd be sitting in. I had to duck in and around people putting their luggage into the upper compartments and look for my number on the back of my seat that matched my ticket stamp. As I walked past one of the windows, I glanced out and saw the right wing. It somehow gave me reassurance that I'd be fine and I'd soon be having the time of my life. "I'll soon be in the air."
The Singapore Airlines needs to thoroughly understand the plans being pursued by the British Airways, Cathay Pacific, and Virign Atlantic in improving the comfort and quality of service it provides to its customers. The Singapore Airlines needs to continue differentiate itself by examining the strengths/weaknesses, and key points of these and other competitive airlines.
Have you ever wondered what it 's like to have your office 30,000 feet above the ground?Aviation is a career for those interested in working with computers and the airplane.whether working on the ground preparing for a flight or in the air transporting people to their destinations pilots are always busy traveling around the world. Pilot don 't only transport people around the world but also cargo. Although being an Airline pilot is a thrilling career it takes many years of learning, experience, and licensing all in which factor into a wide variety of different work atmospheres.