Patience is a Virtue. Not in the Sky though.

epa03584133 US Airways and American Airlines jets sit at the terminal after the airlines announced the merger of the two airlines created the worlds largest airline company at the Dallas/Fort Worth international airport in Ft. Worth, Texas, USA 14 February 2013.  EPA/RALPH LAUER

American Airlines have been in the news lately about the merger with US Airways. Now that they are being a huge powerhouse in the airline market, they are trying to do everything to make things go smoothly.

What is the hardest part about flying? Most people will agree it is the long waits or sitting for a long time. What if an airline is willing to change what they are doing in order to cut down on the time.  American Airlines is now trying to implement a new system that will shorten boarding times.

This relates to class when we discussed about bottleneck analysis. Bottleneck analysis is the part of the process that is lacking the most and has the lowest effective capacity in the system. Usually in order to increase efficiency, this is generally the first thing that is shortened. That is exactly what American Airlines is trying to do. They found the process that was the longest and try to cut it down. They did it by first finding the process that they can actually control and not things such as security or the actual time it takes to get from one destination to another.

American Airlines intends on improving on on-time performance. “American’s new method involves allowing passengers who are traveling light, with only a carry-on item that fits under the seat in front of them, to board early, before the second group” (Forbes). Basically, the order of the boarding schedule is now changed. This process did not take anything out but simply was an order change. By changing the order, the time is now reduced by two minutes. It does not seem like two minutes is a big deal but when there are 3,000 flights a day, which saves a lot of time.

Virgin Airlines did do something similar to this but decided to stop the program in 2011. Some of the problems they faced was the debate about how big an item would have to be in order to qualify for an carry on or people being dishonest about putting their bags in the overhead compartment. They personally thought that it would be better off not doing the program anymore. American Airlines so far in the tests have not ran to any of those problems. Soon this will be implemented in all American Airline flights.

Do you think American Airlines will run in to a similar problems Virgin had when they do it on a nationwide scale? What do you think the extra time will do on the performance of the flights? Will this plan help American Airlines to gain more market share and become the top airline?


2015 = First US Lexus Production Plant

Many people know that Lexus is the luxury brand that Toyota owns. The company is planning on opening a new production plant in 2015. The plant will be located in United States. Although, Toyota does have plants make Toyota brand cars, this will be the first US plant that Lexus will open. It will also be the very first time the Lexus ES will be produced outside of Japan. This is very interesting because most companies would look to go to countries with cheap labor and flexible labor laws. In the US, there are a lot of regulations that protect workers. What would cause Toyota to bring Lexus in the US?

Just as we learned in class, there are a couple reasons why companies would globalize. Some of the reasons are to reduce costs, improve their supply chain, and provide better goods and services.

It is reported that “[Lexus] will receive as much as $146.5 million in tax credits, significantly bringing down the overall cost of the investment. Bloomberg reported earlier this week that Toyota would have to invest $531.2 million and add 570 full-time jobs in order to yield the full value of the package”. The tax credit is definitely one of the main reasons why Lexus would want to come relocate in America. This move will help reduce costs such as shipping the cars from overseas by improving their supply chain. Also it will help provide a better service for Lexus owners because the plant is not located domestically.

Not only does Lexus benefit from this new plant but so does the people of Kentucky. In order to be efficient and complete their goal of producing 50,000 per year, they will need to hire a lot more workers. This will create a lot of new jobs for the people of Kentucky. Everyone seems to be pleased with the move and there have been no ethical problems with it. Even the state governor said, “This is a great day for Toyota and for the commonwealth of Kentucky”.

Toyota is also looking to retain its title as the “world’s biggest carmaker” because Volkswagen is closing the margin between them. If the opening of the North American Production Plant, this will give them the edge they need. Hopefully with the success of the new US plant, this will cause more companies to relocate here.


Do you think this was a will be a smart move for Lexus to produce their cars for the first time outside of Japan? What would some of the concerns be for the carmaker?

Do you think the US government is giving these large tax credits to help stimulate the economy by creating new jobs?

Will other carmakers follow?