Are the budget airlines in a different strategic group then the major airlines?
I would have to say that they do have different strategies, the major airlines works on a hub and spoke strategy which means they network there routes through major hubs. They do this so they can serve more cities then they would flying point to point. This helps them also fill the seats on the planes. they also have unions for their employees so this means they pay higher salaries.
The budget airlines strategy is to save the customers money by cutting cost. They train their employees to be able to do multiple task instead of one job. Also they offer no frills on their flights meaning no food or drinks. This helps keep their cost low. Also they only fly in the large market routes such as the east coast. One way that they make sure they keep there cost low is they buy a mass amount at once of the same type of plane so they get a discount.
So to over view the differences in strategies the budget airline offers a low cost flight with no frills through a high traffic routes. They do this with a small crew and less employees. The major airlines work on a hub and spoke strategy and offer comfort and frills. They also work with a large amount employees and crew who have unions.
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I'm doing question 4. I think in order for the industry to return to profitability, the major airlines need to step up their competition with the budget airlines. The major airlines can do so by following the example of the budget airlines such as hiring nonunion labor and cross-training employees to perform multiple jobs. The major airlines can also cut costs by not offering inflight meals or beverages.
Plane wreck question #5-Ryan MacKinnon
5) What the major network airlines need to do to respond to the competitive threat posed by the budget airlines is to come up with bigger and better flight decisions. First off I believe they need to get out of the unionized work force. By doing this it will allow them to assign different tasks to different employees and they won't need so many employees anymore. But the main idea I believe they need to work on the most in order to get back on track is the price of a ticket.
The major airlines have taken a slight step in the right direction however its still not good enough to get back on track. In order for them to take over its going to take a lot of time, energy and the biggest thing of all is trust from their customers. No they have not done enough at all to get out of this black hole they are in. What I believe should happen is all the major airline companies should agree on becoming one big corporation. That way here they will be able to give their own ideas and come up with the best plan to attack the smaller airline companies and really take charge of the industry. The biggest step for them to take is to truely give out a survey to their customers and see what they think should be done in order to get back on track. Thats the only way a company can get out of debt fast, is by listening to their customers.
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