Flight

The airline carrier line of business has been a very popular topic in the last few years. Many changes have taken place such as bigger and better planes, new competitors, mergers, and some not so good news. The U.S. carriers have been dropping in their ranking internationally over the last several years. Asian and Middle Eastern competitors have been dominating the international market. However, it was recently noted that the U.S. seems to be switching its gears and is taking a position to head into the international game stronger than it ever has. The bigger U.S. carriers have closed their mergers and have adjusted their managerial approach and are on the rise again.

While all of these mergers were going on with the U.S. carriers, Asia and the Middle-East took advantage of the time to take over the international air traffic. Both Asian and Middle-Eastern airlines dominated the international markets while all of this was going on in the U.S. Also because of all of the mergers that the U.S. carriers have been going through, it has been noted that they have fallen a bit behind on the aircrafts they are using although this may be changing quickly with Boeings new product.

The chart below shows the ranking of airlines done by the World Airline Awards. The first U.S. airline in the ranking was Virgin America ranked 26th.

2012		2011	2012		2011
1	Qatar Airways	1	11	Garuda Indonesia	19
2	Asiana Airlines	3	12	Virgin Australia	32
3	Singapore Airlines	2	13	EVA Air	16
4	Cathay Pacific Airways	4	14	Lufthansa	15
5	ANA All Nippon Airways	11	15	Qantas Airways	8
6	Etihad Airways	6	16	Korean Air	24
7	Turkish Airlines	9	17	Air New Zealand	7
8	Emirates	10	18	Swiss Int’l Air Lines	13
9	Thai Airways International	5	19	Air Canada	21
10	Malaysia Airlines	12	20	Hainan Airlines	23

The issue now is for the U.S. to enter the international market and make its presence known. Latin America and Africa both had an increase in demand for air traffic but the U.S. missed the opportunity to enter the market during that team. It seems that with all of the upgrades to the U.S. carriers, they should be able to hit the international market much more effectively the next time an opportunity like that arises. It would be interesting to see how the U.S. carriers choose to enter the international market considering the different routes they can take to do it. One of their many options is to rush into the situation to try and make an impact as soon as possible. The concern with this is that they may try to cut corners to enter the market quicker. This type of strategy usually comes at the cost of the customer. Another option they have is to upgrade their fleets and then enter the market. The downfall with this is time. While they are upgrading their fleets, other international carriers may be upgrading their own fleets and pulling farther ahead which would make it more difficult for the U.S. to enter later. They would also have to take into consideration the opportunity cost of taking an even longer time than they already have been.

If you were a U.S. carrier, what strategy would you use to enter the international market? This does not have to be one of the methods listed above and can be your own idea.

Would you even consider waiting any longer to enter the market considering the state of carriers currently?

http://www.bloomberg.com/news/2013-06-02/u-s-carriers-ready-to-go-on-attack-after-mergers-iata-predicts.html

http://www.worldairlineawards.com/Awards_2012/Airline2012_top40.htm

In today’s travel industry, delays, overbooking and cancellations have become common place. Today there are many airline carriers to chose from but only very few have stood the test of time and and maintained their profitability By Providing better service and less obstacles to swift traveling, companies like United and American Airlines have grown into brand names if you will. However, when large carriers like American Airlines expand and grow, the quality of their service is potentially at risk.

In March of 2013, congress approved one of the largest mergers in the airline industry’s history. It agreed to the merger proposition for American Airlines to combine with U.S. airways making it the largest airline carrier in the world with over 6,700 daily flights to 336 destinations and a little over 10,000 employees. Now the common idea with large mergers such as this, is that quality will suffer as the company become larger. So by analyzing some potential outcomes of the current picture of American Airlines and what may happen with the pending merger, we can see where things might change.

The amount of miles earned by U.S. airways fliers will not be lost in the merger but will be transferred in a one for one type of exchange into American’s AAdvantage program making it the largest airline miles club in the world with approximately 100 million members.

Another concern fliers have is the difference in in flight products offered. For example, American Airlines offers meals to fliers on flights less than two hours long, while on U.S. airways the flight must be longer than three and a half hours long before you will receive a meal. With the merger, American Airlines fliers are quite worried about the amenities they might lose when flying on American.

Flying could also get more expensive, with so many routes under the American flight portfolio, there is a strong possibility for a fare hike on many different routes where there is little to no competition from other airlines. The main hope for this merger according to executives at American Airlines is to come together and offer more fliers a better experience with seamless travel to more destinations. It seems with the intended proposed plan that American will actually improve on the delivery of a quality service to a larger group of customers.

In many instances, large mergers such as this often have negative affects on the companies involved and they often lose much of their clientele as the quality of the product or service is diminished However, in this case it appears that the intended plan would only serve to benefit both groups and their clients, as U.S. Airways customers would see an improvement on departure and arrival times with access to more daily flights, as well as an increase in the quality of the in flight services currently offered on many American flights, and the American airlines customer would see a significant increase in the number of destinations offered along with a much more flexible array of flight times with the increased number of daily flights as well. It would seem as though this merger would make American Airlines the most competitive and profitable airline in the industry which will be determined for certain when the merger takes place at some point in the projected 3rd quarter of 2013.

Works Cited

http://travel.nytimes.com/2013/04/14/travel/if-american-airlines-and-us-airways-merge-what-should-fliers-expect.html?pagewanted=all&_r=0

http://www.foxbusiness.com/news/2013/04/15/new-american-airline-ceo-parker-to-get-15-million-in-merger-pay/

http://www.nbcnews.com/business/court-approves-american-airlines-us-airways-merger-2B9117378

http://www.huffingtonpost.com/scott-keyes/what-the-american-airlines-merger-flyer-miles_b_2688076.html