Anonymous
Anonymous asked in Business & FinanceCorporations · 1 decade ago

what are the threats, weaknesses and strengths that an airline faces in genral?

for example competition from other airlines or soemthing like that!

10 points for the best answer !!

thnx

2 Answers

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  • Sandy
    Lv 7
    1 decade ago
    Best Answer

    This SWOT Analysis is for American Airlines, Inc. but you can generalise it.

    Strengths

    The world largest airlines

    The heart of almost every innovation, from discount fare to frequent flyer

    Wide and Large channel of distribution and subsidiaries offices

    World-Class Customer Service (SABRE Group)

    The Leader of Market share in the Airlines industry

    Modern computer reservation systems and Modern Baggage Handling

    Strong Image Brand/Well perception

    Rapid growth and Ambitious expansion plan (look at the chart below)

    Alliance between AA and British Airways will be a powerful force. They together control 60 % of flights between the UK and the US.

    Weaknesses

    Human Resources trouble. There are 2 major strikes since 1993. The first one was happened in 1993 when the Association of Flight Attendants went on strike. The second one was the Allied Pilots Association threat’s strike in 1997.

    Financial trouble which is caused by the over-expansion of the increasing fleets

    The big mistakes that its CEO/Chairman has already done, such as over-expansion, cost cutting Union contracts (that caused 2 major strikes in the last 5 years) and the conversation between AA’s CEO with Chairman of Braniff, Inc that produced an anti trust law suit from Justice Department.

    Unclear Market Segmentation: Business travelers or Pleasure travelers.

    Failure to manage its cost resulted AA lost its profitability in recent years

    Low Overall Satisfaction Service Rating Index(Source: Consumer report, July’91)

    Opportunities

    It is a necessity product because people will always need to travel

    An alliance between British Airways and American Airlines will give them an opportunity to be a market leader of an enormous Transatlantic market.

    Technology: (1) Minimize costs and/or use them only where they barely substitute for totally measured dollars, (2) Increase the firm’s electronic commerce transactions, revenues and readership.

    Airlines industry is a high growth industry and a huge market

    The opportunity to substitute the short-haul alternative transportation.

    Threats

    Airlines industry is characterized as one of high risk and low return, which is obviously the wrong combination.

    Union Labor / Pilot – Strike

    Government Deregulation, Regulation and Re-Regulation

    Antitrust suit law

    Global Alliance, such as Northwest-KLM, Continental-Air France-Virgin, Delta-Air France, and the new and formidable Star Alliance composed of United-Lufthansa-SAS-Air Canada-THAI-Varig

    Technology. For example: If the industry is not using IT or does not need to use it effectively and intensely , the chance of doing anything new is low.

    Substitute products, such as High-speed trains and Auto travel

  • 1 decade ago

    Do your own hw on SWOT Analysis.

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