The 9/11 attacks were a series of co-ordinated terrorist attacks upon the United States of America (USA) carried out on Tuesday, September 11, 2001. The global economy and the airline industry felt the shock, and is still trying to recoup. This essay will discuss the impact of the 9/11 attacks upon the American and international airline industries, particularly assessing the potential schemes for a future strategy. It will first look at the attractiveness of the US airline industry before and after the 9/11 attacks. A SWOT analysis will be then conducted as a basis for recommending future strategic options for an individual FSC company. It will finally consider the plausible outcomes for a future strategy, given that a similar event is probable.
[...] 16 294-298, Full text [online] Available : www.emeraldinsight.com [Accessed 24 May 2006] Rhoasdes, D L and Waguespack B P Jr (2004) Service and safety quality in US airlines: pre- and post-September 11th, 307-316, Full text [online] Available: www.emeraldinsight.com [Accessed 24 May 2006] US department of Transportation (2003) Impact of air carriers emerging from bankruptcy on hub airports, airport systems and US capital markets, Full text [online] Available: http://ostpxweb.dot.gov/aviation/domav/dotspecterstudy.pdf [Accessed 23 May 2006] Appendices Figure 1 : BA alliances at a glance Carrier oneworld Codeshare Franchise BA Executive Club benefits Aer Lingus X X X Alaska Airlines X America West X American Airlines X X X BMED X X Cathay Pacific X X X Comair Pty Ltd X X Finnair X X X GB Airways X X Iberia X X X Japan Airlines X X Jet Airways± X LAN X X X Loganair X X Qantas X X X SN Brussels Airlines X X Sun-Air of Scandinavia X X Source : www.britishairways.com 1. Impossible route to manage because not enough resources. Growth BA Current Business 2. Impossible route to manage because not enough resources. High Investment No Growth Consolidation Low Investment 3. Strategic Capability 5. Diversification 4. [...]
[...] In an attempt to assist the airline industry, the US Air Transportation safety and System Stabilisation Act provided them US$ 5bn bailout for direct losses and US$ 10bn for federal loan guarantees. These security measures lead to an increase of 2.50 $ tax, per flight, per passenger. The OMB (Office of Management and Budget) established three factors that the Board should consider so as to avoid further conflicts (Dokupil, 2003). The most significant factor is the ability of the borrower to repay. [...]
[...] As Byrnes (2004) said: “resetting a company's strategic direction to secure its core business in an era of structural change is both difficult and critically important.” 3. Scenarios : which future may come The attacks were unpredictable and devastator for the airline industry. It is therefore important for a company to start thinking now how it would react, given that a reoccurrence of a similar incident is probable. Future strategies will definitely take into account what happened and the consequences of September 11. At that time, companies reacted instinctively, with LCCs offering lower prices, some FSCs doing the opposite, and many filing for bankruptcy. [...]
[...] FSCs mainly get their revenue from economies of network size and traffic density. Since their introduction, LCCs' market shares never stopped increasing, outperforming FSCs, which made them feel complacent. Levine (2002) avowed that their best customers were very price-sensitive leisure travellers, “watching for every penny”. Business travellers remained primarily attached to FSCs because of retention strategies, such as frequent flyer and corporate discount programs. The real value of US airline yields, measured by RPKs (average revenue per passenger kilometre) has gradually and steadily declined since 1970, for about annually, despite a rising number of passengers. [...]
[...] In April 2006, passenger capacity, measured in Available Seat Kilometres, was above April 2005. BA underpins its relationship with customers by CRM applications, web intelligence and business intelligence. Besides, the implementation of IT components in its activities is also a key element, enabling higher performance and better service quality delivering. Through its website, BA gives updated guidance, help and reassurance, and assists customers. Its online booking service is becoming more popular, enabling BA to reduce from its previous selling costs. [...]
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