Tuesday, February 18, 2020

Merger between the United and US Airways Term Paper

Merger between the United and US Airways - Term Paper Example (Continental, 2012). Under the United Continental Holdings – the parent company of Continental and United, its 4th quarter 2011 revenue was increased by 5.5% with annual profit of $840 million (Omaha World-Herald, 2012). The US Airways is â€Å"the 6th largest U.S. airline by traffic and 8th largest by market value in the United States† (Nolan, 2011; Fenske, 2008). Marketed under the brand name of US Airways Express, the PSA Airlines and Piedmont Airlines are two of US Airways’ wholly-owned subsidiaries on top of its other four airline subsidiaries (Polek, 2008). The US Airways has 341 mainline and 319 regional aircrafts across 200 destinations around North- and South America, Europe and the Middle East. The company is operating 629 daily flights throughout its 133 non-stop destinations (Portillo, 2011). Its annual net profit excluding net special charges was $111 million as compared to $447 million in the previous year (PRNewswire, 2012). After deducting the net special charges, the company’s net profit was $0.68 million as compared to $2.34 million during the previous year (BusinessWeek, 2012). Incentives to Consolidate Although the merger plan between the United and the US Airways has not been successful ever since the United decided to merge with the Continental last July 2010 (Breaking Travel News, 2010), potential merger between the United and the US Airways never died (Portillo, 2011). In fact, Derek Kerr – the Chief Financial Officer of US Airways stated that â€Å"consolidation is one of the major ways this industry can become profitable† (Chakravorty, 2010). Aside from economies of scale, most of the existing airline companies are merging to expand or dominate a busy hub. In other words, merger enables these airline companies to have a competitive advantage by investing on geographically differentiated routes. This explains why other major airline carriers such as Delta was eager to merge with Northwest wherea s the United with Continental (Portillo, 2011). Furthermore, Portillo (2011) explained that the hub of US Airways is the key to 90% of the airport’s flights. This aspect will give the United the incentive to decide and consider consolidating with the US Airways in the near future. Analyzing Firms within the Industry Strategies made by the firms within the U.S. airline industry can be well understood by conducting an industry analyzing using the Porter’s five forces framework. Based on this framework, it makes sense that the U.S. airline industry has a low barrier due to the increasing threat of new entrants (Ramon-Rodriguez, Moreno-Izquierdo and Perles-Ribes 2011). Ever since the Airline Deregulation Act was implemented in 1978, firms within the U.S. airline industry started experiencing the business consequences of a tight market competition. Even though the U.S. government removed the political restrictions over the U.S. domestic routes, schedules and domestic fares, some of the airport regulations, limited takeoff and landing slots and airline

Monday, February 3, 2020

The Boeing Company Assignment Example | Topics and Well Written Essays - 2500 words

The Boeing Company - Assignment Example The customers of Boeing Company are mainly the famous and established airlines and most of the country airways having their operations going globally (Yennev 2010). These airlines include United Air Lines, Caribbean Airlines, Delta Airlines, Canadian Pacific Airlines and other major airlines, other major customers include the various country Airways. Boeing Defense, Space and Security main customers are United States Air Force, Air France, and other governments’ mainly military jets and airplanes (Yennev 2010). The order qualifiers of this company is that it is a multinational company and has a consolidated financial base overcoming the capital and financial barriers having a number of manufacturing and assembly plants in the major countries globally another major qualifier is that the airplane manufacturing and aerospace aviation industry is less competitive with only a few firms (Russell 2005). The order winners of Boeing Company is a better marketing policies that has edged out its major competitors Airbus Company which involves effective market segmentation of its customers on geographical locations. It is also important to note that the company has an effective positioning and targeting strategies where the company has developed airplanes basing on the distance and capacity to suit the customer’s preference and needs (Russell 2005). Existing problem There are some problems that Boeing company faces currently which include: managerial problems where it is ridged semi-autocratic management style in which the employers and top management make decisions without involving employees which negatively impacts on the development of new operations and management designs that are important to any multinational company thus the need to adopt modern management models (Duane 2009). Secondly is the labour problem mainly affecting production characterized with delayed delivery and this has been greatly attributed by the inexperienced workforce dealing with t he aircraft designs which involves complex operations and advance technologies which is complicated further by the need to adopt new sophisticated manufacturing and production designs considered to be efficient and effective (Yennev 2010). This situation has created more operations management leading to increase in overall cost per plane moreover complains from the major customers thus special inspections are carried out by The Federal Aviation Administration (FAA) on all the airplanes and jetliners and that the employees motivation has not been taken care resulting into increases inefficiencies in the operations and increased challenges in project management. The airplane and jets commercial market is experiencing a slowdown due to the impacts of terrorism in which the airline industry has been hit harder especially after the 11th Sept there has been low demand and significant reduction in the order number, sales to its major customers mainly the airlines and various other country based airways has significantly reduced. The key problem faced by The Boeing Company can be summarized to be the labour workforce management, operations and the overall effective management of its projects (Duane 2009) Impacts of the problem The above problem has greatly impacted The Boeing Company negatively because of its long term persistence in the