Provide a brief overview of the relevant issues and summarize your recommendations. In early 2003, Boeing announced its plans to develop a new airplane (7E7 & 7E7 Stretch) in a market that was facing a tight squeeze on profits. The decline in the airline industry was attributed in large part to the war in Iraq, international terrorism, and fear of spreading SARS. The development of this new aircraft could possibly bring Boeing out of their innovation slump and potentially give them an advantage in the mid-sized aircraft market. Since 1994, Boeing had not put a new airplane into production and had failed to follow through on two commercial aircraft programs.
INTRODUCTION TO THE REPORT Boeing 787 Dreamliner was first announced to the public in January 2003 with approximated costs of five billion dollars , since the sales of the aircraft were high it was supposed to enter commercial service during 2008 but the building up of aircraft seemed more anticipated than expected , since the management decided to use composite materials as an alternative for traditional metals as composite materials are lighter , stronger , cheaper and also resistance to wild variety of chemical agents including acid rain and salt spray as these are the conditions under which metals suffer , Boeing also shared their views in development of air craft with suppliers which effected in a project significantly more anticipated than expected . More than three years later after the project exceeded the estimated budget at last 787 entered commercial service in September 2011. REPORT SUMMARY A standout amongst the most noteworthy vital choices Boeing made in the 787 undertaking identified with out-sourcing. Truly Boeing had both composed and fabricated the vast majority of the parts for their airplane. For the 787 undertaking a choice was made to move further towards a frameworks joining model.
This is £355 million less than in 1998 which illustrates the decline in demand for British Airways services. Although this decline in profits of 61% seems unacceptable it was caused by a variety of abnormal expenses. For example the company spent £35 million on computer systems to ensure that they are “year 2000 compliant”. British Airways also entered the low cost air travel market during the year with the launch of “Go”, which is running at a loss as it tries to establish itself in a highly competitive business environment. Lower fuel prices and the strength of the Pound benefited British Airways, and as a result the company stocked up on 45% of its fuel requirement for the next financial year.
$10 billion dollars will go as aid to US commercial airlines and the other $15 billion will go to increasing the benefits of the unemployed. It is important to help the airlines recover because of the money the represent in business and tourism. Also there is the issue of the lose of jobs in aviation since the attacks. In the 2-month period since September 11th 200,000 jobs have been lost in aviation. With the unemployment rate at it’s highest in the past 20 years the government cannot afford an even larger decrease in jobs.
It seems as though instead of purchasing new aircraft the pilots wanted a pay increase. What the pilots want is a pay increase of 11% over the next four years. What the have been offered is a 5% increase. The argument that the pilots have put forward is the fact that their offer does not even keep up with inflation. It looks as though a strike would be very unlikely because of the amount of money involved, somewhere around fifty million a day would be lost by American.
(XERO Annual Report, 2015) Such a fall may because of the losses incurred by XERO over the last two years which is why shareholders are not paid off dividends. This will lower the price of XERO shares in New Zealand. XERO’s share price fall suddenly after the losses got double in the current year. XERO started the current financial year with $269m worth of cash including $147m raised from its investors. XERO’s share price almost halved over the last year.
Lucent also said losses for its Winstar Communications loans and other write-offs totaled 15 cents per share. Analysts on average had expected a second-quarter loss of 23 cents a share with a range of a loss of 12 cents to a loss of 47 cents, but that estimate included results at Agere, according to Thomson Financial/First Call. Lucent expects to complete the Agere spinoff by the end of September. LUCENT NOT ALONE The beleaguered company is not alone as demand in the telecom equipment sector has slowed, analysts said. Nortel Networks, the largest telecom gear maker, last week reported first-quarter losses in line with an earlier warning, but said earnings could improve next quarter as it cuts 5,000 more jobs and trims costs.
Unfortunately, their plan did not work exactly how they had hoped; one delay caused a domino effect and less than 60 percent of their flights were arriving or departing on time (Southwest Airlines). This is a challenge Southwest is having to overcome still to this day. They are in the process of allotting more time for turnarounds, but in the meantime they will be losing money. This is a sacrifice they are having to make in order to gain back customer satisfaction. One reporter noted, “The poor operational performance is a shocking turn for the Dallas-based airline that typically sits atop customer satisfaction ratings, with such consumer-friendly policies as free checked bags and no fees to change a flight” (Southwest Airlines).
That equates to, on average, about $2,000 dollars per American... ... middle of paper ... ...n dollars plus about 268 billion dollars in interest costs in the next years. With that kind of spending there is no way the economy could grow enough to cover the costs of this plan and many established systems like social security could fall to where they are practically non-existent. Consumers may not be to pleased with the cut either. The cut may have the effect of just balancing the economy not giving it the thrust it needs to begin to grow at an extended rate. Thus the cuts would be only a temporary cure for the endangered economy.