The Virgin Atlantic is providing jobs to wishful applicants that were interested in joining them. But before proceeding further, let we explain what the definition of employed and unemployed is. In this sense, the employed are the one who currently have job meanwhile, the unemployed are those who currently do not have jobs, and together with the unemployed, they create the labor force (O'Sullivan, Sheffrin, & Perez, 2010). From the micro economical perspective, the company is contributing to the country production in terms of providing employment through their airline business. In fact, the more that they employ, the more they contribute to the marginalization of the employed and the unemployed. For example, a successful applicant that will eventually work with them will contribute to the increase of number of employees in their company. Hence, as a result from their participation in the company, the employee will provide labour. The labour that they provide will ensure the stability of the company progression and the maximisation of competency with other airline services. In fact, the larger the number of employee that the company have, the more efficient the company will be. Shortage of employees will surely contribute to the degradation of the company image as there are insufficient staffs to hold and organise the company (O'Sullivan, Sheffrin, & Perez, 2010). Hence, if the problem persisted, the company will face bankruptcy and will eventually shut down or in another cases, they will terminate the particular branch that face the problem of staff shortage. On the other hand, in the macro economic analysis about what the airline company had in connection to the economy is that, the company will provide employment on other count... ... middle of paper ... ...as reducing the number of workers Virgin Australia. Retrenchment for airlines is to achieve profitability by reducing the salaries of employees. When a reduction in the number of employees is done, then there would have been problems of unemployment. Unemployment stands for labor force which was includes employed and unemployed that who are willing to work but unable to find work (Mankiw, 2007, p. 154). For Virgin Airlines we can associate with technological unemployment. Labor replacement by machine due to technological progress which produces various automatic machine and computer had caused technological unemployment. This case will save wage cost because need not employ employee because the existence of technology that is sophisticated. Where self-check-in machine and register via online created for users of sign over the counter which was involving employees.
In 1978, deregulation removed government control over fares and domestic routes. A slew of new entrants entered the market, but within 10 years, all but one airline (America West), had failed and ceased to exist. With long-term growth estimates of 4 percent for air travel, it's attractive for new firms to service the demand. It was as simple as having enough capital to lease a plane and passengers willing to pay for a seat on the plane. In recent news, the story about an 18-yr British...
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 United States would not enter the war until after the Japanese attack on Pearl Harbor in December 1941. But by the spring of 1941 Congress had approved the Lend Lease program, and the aid Roosevelt had promised at Charlottesville had begun to flow to Great Britain, where Winston Churchill was now prime minister. In July 1941, Roosevelt and Churchill met for the first time in Argentia Bay off Newfoundland, to issue a joint declaration on the purposes of the war against fascism. Just as Wilson's Fourteen Points delineated the first war, so the Atlantic Charter provided the criteria for the second.
Operating an air - express transportation industry requires large capital investments, and therefore it can impede the entry of new firms into the industry. For one, Airborne has already its own set of aircrafts and even operate its own airport, and it would be hard for a new firm to compete with this.
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).
Unemployment is affecting the airline industry. Although unemployment in the United States is relatively low, the airline industries unemployment has been more volatile. As unemployment has risen, the airlines have laid off a much higher percentage of their people. As unemployment has fallen, they have hired back a large number. Layoffs among major airlines are not uncommon. Southwest is unique in its history of refusing to layoff any employees.
Other airlines approached the economic crisis by limiting their service or letting go of employees, whereas Southwest tackled the problem by offering workers secured positions for lower wages. Though the circumstances were not ideal, overall employees responded positively to the option of keeping their jobs. They also promote internal marketing strategies within the workplace. Southwest has a clear vision which employees strive to be a part of. In fact, part of their vision is in the best interest of their employees, as a common mantra within the company is, “customers come second… and still get great service.” They offer a casual work environment. This approach not only benefits the employees comfort, but also coincides with the company’s easy-going brand image it wishes to portray. Employees are at ease in at their job and overall enjoy what they do. Southwest also makes a point to attract the desirable candidates for their positions. They emphasize teamwork. Employees are encouraged to help each other out to strive toward a common goal. Employees are often rewarded for their achievements as well. As seen in exhibit 1, these strategies to keep employee satisfaction high, are factors that keep loyal employees within the company.5 Southwest makes every attempt to keep employees content as they believe happy employees lead to happy customers. Southwest has
If the short haul passenger was the backbone of Southwest Airlines success, then their 737s were the lifelines that supported it. By choosing the 737 as the airplane for all of Southwest's flights, the company saved time and resources in training its employees. The crew could be easily substituted for one another due to the extensive training on the 737. Low costs and, therefore, low fares are an enormous competitive advantage, when combined with their high-quality and loyal workforce. A very unique culture was found at Southwest Airlines among all of its employees.
Lufthansa, one of the world’s biggest airliners, has divisions handing maintenance, catering and air cargo. Since the World War II the airline industry has never earned its cost of capital over the business cycle (Hitt, 2010). Most of the airline companies have either filed for bankruptcy or are being bailed out by their government. Lufthansa had also gone through these tough times, but had resurfaced to become one of the worlds most profitable airline company. The company adapted a transnational strategy, seeking to achieve both global efficiency and local responsiveness. Lufthansa’s monopoly in Germany came to a halt with the creating of the European Union. All the EU member countries become one regional and therefore the European competition became, an increasingly a local competition. Lufthansa created its regional Hubs, to cater for its domestic market. But the availability of substitutes such as bullet trains and the Euro tunnel, made is necessary for Lufthansa to create short traveling time, customizations and quality standards in the region to achieve a competitive advantage. But outside the EU there are no substitute to air travels as such all the flag carriers are competing in the market, the international airline industry is a highly competitive environment. A new force has also emerged in the world of air travel, in the form of three Gulf airlines with jumbo ambitions. Within a decade Dubai’s Emirates, Qatar Airways and Eithad from Abu Dhabi have between them carried the capacity of two hundred million passengers (Micheal, 2010). The company had to go global and therefore adopted the international corporate-level strategy, where Lufthansa will ope...
Tom, Y. (2009). The perennial crisis of the airline industry: Deregulation and innovation. (Order No. 3351230, The Claremont Graduate University). ProQuest Dissertations and Theses, , 662-n/a. Retrieved from http://search.proquest.com/docview/304861508?accountid=8364. (304861508).
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.
Shuk-Ching Poon, T. and Waring, P. 2010. The lowest of low-cost carriers: the case of AirAsia. The International Journal of Human Resource Management, 21 (2), pp. 197--213.
Airline industry is affected by no. of factors such as fuel price fluctuations, high fixed costs, strong influence of external environment and excessive use of marginal costing by carriers. Recessions in the industry tend to last longer, while recovery periods are generally shorter. Over the past nine years, it is observed that industry has made losses for five years and during the profitable years margins were on a lower end. The airlines industry is acutely sensitive to external events such as wars, economic instability, government policies and environmental regulations.
The airline industry is very susceptible to changes in the political environment as it has a great bearing on the travel habits of its customers. An unstable political environment causes uncertainty in the minds of the air travellers, regarding travelling to a particular country.