Case Analysis: Southwest Airlines Strategic ..

After 17 straight profitable quarters, the US aviation industry is on a winning streak

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The result was reversed from net income of $143 million earned in the year-ago period and marked the company's fourth straight negative reporting period following the rare profit in last year's third quarter.

Chairman and CEO Gerard Arpey noted that AA's quarterly fuel costs soared 30% year-over-year and told reporters and analysts that "it's no secret that the court restructuring process used by our competitors [in the previous decade] has intensified our competitive challenge." AA has long asserted that labor cost savings achieved by other major US airlines via Chapter 11 bankruptcy restructuring (avoided by AA) have left it at a serious disadvantage.




18 October 2011
Air France ousts Chief Executive to eradicate losses
News reports state that Air France-KLM SA ousted its chief executive on Monday and recalled the chief architects of the Franco-Dutch merger with a brief to eradicate losses while preparing for an anointed successor.

Europe's largest airline by revenues, which has fallen behind peers due to a cocktail of costs, debts and competition, said after board talks that recovery and the improvement of performance would be its "top priority."

The group said it postponed plans to reorganise into a full fledged holding company, with integrated divisions, from the beginning of 2012 until 2013 and restored its tried-and-tested old guard to run things in the interim.


But it has suffered more severely than much of the industry recently because of high labour costs, a large debt and from competition that has especially affected Air France.

The group's shares have fallen almost 53 percent in the past six months, compared with a 26 percent decline for International Airlines Group (IAG) and a 35 percent drop at Lufthansa .

Although many savings were made, analysts had expressed concerns about the profitability of Air France-KLM under Gourgeon, a former military engineer with fighter aircraft qualifications who failed to keep the airline in the black.

Air France-KLM posted an operating loss of 145 million euros ($201 million) in April-June, compared with a profit of 230 million at Lufthansa and a 134 million-euro profit after exceptional items at IAG, parent of British Airways and Iberia.




13 October 2011
Kingfisher hit by oil companies stopping fuel supplies
News reports state that Flights of Kingfisher Airline were disrupted in some major cities, including Delhi, this evening after oil companies stopped jet fuel supplies to the private air carrier for non-payment of dues.

Hundreds of passengers were put to hardship after at least eight flights including one on the international sector were delayed or cancelled.

In Delhi, seven domestic flights and one international flight were disrupted, airport sources said.

The disruption caused a chaotic situation at the IGI airport here as angry passengers demanded answers from airline officials.

26/02/2018 · Porter’s Five Forces Analysis of the Airlines Industry in the United States

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“If the government stops cross-subsidising, and prices the ATF (aviation turbine fuel) on par with international prices, we will be able to manage our finances much better,” Mr Sundaram said.




21 November 2007
Shares in Austrian Airlines AG nosedive
News reports state that shares in Austrian Airlines AG nosedived in heavy volumes in mid-afternoon trading, as the carrier led a broad decline among European airline stocks on the back of rising oil prices.

At 2.26 pm, Austrian Airline shares were down 7.83 pct to 5.53 eur, while the ATX index was down 1.88 pct to 4,328.01.

Analysts attributed the carrier's strong share price loss to additional gains in the already high price of oil, as well as to the general weakness in trading on the Vienna bourse today.

On Friday, the airline said its October passenger traffic volume was up 0.2 pct year-on-year to 952,600 passengers, while its passenger load factor for the month was 76.4 pct, compared to 75.4 pct a year earlier.




21 November 2007
More turbulence in Brazil's airline industry
News reports state that there is more turbulence in Brazil's airline industry with the grounding of BRA, Brazil is left with two dominant groups: TAM and Gol/Varig

The suspension of flights at BRA, sharp profit falls at both Gol and TAM in the third quarter and the return to international duty of Varig, all in the past few weeks, illustrate perfectly the fluctuating fortunes of the Brazilian airline industry.

São Paulo-based BRA, which had built up a network of around 30 destinations in under two years, suspended all of its domestic and international operations in early November.

An airline is a company that provides air transport services for traveling passengers and freight

Southwest clearly has a distinct advantage compared to other airlines in the industry by executing an effective and efficient operations strategy that forms an important pillar of its overall corporate strategy. Given below are some competitive dimensions that will be studied in this paper.

Porter's Five Forces Framework is a tool for analyzing competition of a business


Read our featured insights | McKinsey & Company

Operating revenue climbed 15.5% to CNY23.7 billion while operating expenses jumped 23.8% to CNY23.4 billion.

Neither carrier released first-quarter traffic figures.

Industry analysts also cited market demand slowdown as the main reason for the results.




26 April 2012
BA's Willie Walsh warns of more airline failures
News reports state that British Airways and Iberia boss Willie Walsh warned of further airline bankruptcies in the coming year and said he envied the economic model of major Gulf carriers that have managed to redraw the aviation map efficiently around the Middle East.

Aviation Analysis Reports | CAPA




18 July 2014
Air China profits expected to plummet 55%
News reports state that Air China expects its first-half net profit to plummet 55% to 65% compared with the net income of CNY1.12 billion ($182 million) in the year-ago period.

According to Air China’s written statement released by Shanghai Stock Exchange, the carrier attributed the sharp decline to exchange losses resulting from yuan depreciation.

Earlier this week, China Southern Airlines also reported a first-half net loss of CNY900 million to CNY1.1 billion ($146 million to ($178 million) compared with a net loss of CNY302 million in the year-ago period.

Industry analysts point out that Chinese carriers rely on exchange gains to earn profits with yuan appreciation.

China Eastern is also expected to report first-half losses.

Looking ahead, China’s big three carriers are predicted to continue to report profit declines or operating losses in the second half.

Southwest Airlines SWOT Analysis | MBA Tutorials

The expanded fleet will allow Monarch to continue to win new customers, as part of its network strategy focused on scheduled flights, rather than its traditional role as a charter carrier.
Monarch Group’s most recent results show the airline has been on the road to recovery of late, reporting a £5.9m pre-tax profit in the year to October 2013, after a £33m loss in the prior year.
However conditions in the travel industry continue to be tough, with overcapacity helping to push yields down, and operating costs continuing to rise.
The group – which also owns tour operators Avro and somewhere2stay – hired industry verteran Andrew Swaffield to run the airline in April of this year,
Monarch, which has a strong regional presence in the UK, flies from airports including Manchester and Leeds-Bradford.
A Monarch Group spokesman declined to comment.