Category: Airlines

The Qantas Airline of Australia is the most prominent airline in the country as far as fleet size, international flights, and worldwide destinations are concerned. It is also the 3^rd oldest airline company in the industry after Avianca and the KLM. It was established in 1920, and its headquarters are based in the Sydney suburb of Mascot (Buhler, 2001). Its center of operation is at the Sydney airport. As far as the market share is concerned, Qantas airline holds a majority of the Australian domestic markets and carries a substantial percentage of all the passengers traveling in and out of Australia (Gilder, 2014). Even though it has a substantially higher market share, it experiences challenges. As a result, increasing fuel prices and slow world economy have both compelled the airline company to lose money.

The CEO Alan Joyce is faced with callous decisions to make. He is contemplating whether or not to sell Qantass frequent flyer program. He regrets that it would be an awkward move for the airline to sell its frequent airline flyer, yet it is the Airlines reward program. The flyers sale will ensure that the company avoids these financial uncertainties (Australia, 2014). On the other hand, the frequent flyer programs deal would permit other firms to access the companies most loyal customers that comprise both business and first-class customers. Therefore, the management will need to conduct extensive brainstorming sessions in order to get an appropriate solution.

Decision-Making Process

Decision-making requires a structured cognitive method of developing a strategic plan from a collection of alternatives that yield outcomes which are commendable. Kourdi (2011) claims that management is bound to make several decisions, which might comprise programmed and non-programmed decisions, routine and strategic decisions, and tactical or operational decisions (Buhler, 2001). The decision to sell Qantas Frequent Flyers to solve its financial problems is a strategic decision. These decisions are essential and necessary for any organization because they affect the companys objectives and goals and all significant policy matters, and involve excellent investments.

Kourdi (2011) notes that critical choices are non-repetitive, dynamic, and multifaceted in nature, and thus appear to influence the long-term activity of an organization. Nonetheless, Kourdi (2011) argues that strategic choices are taken following careful analysis and evaluation of several alternatives, and they are applied by the higher-level management. When Alan Joyce backs the decision to sell the frequent flyer program, it will affect Qantas airline goals, objectives, and the policies that govern the operation of the corporation in the airline industry.

Therefore, after deliberations, the resolution arrived at is non-programmed because it came after the airline company had faced some financial challenges that made the CEO think of selling its frequent flyer program. These are choices which are unexpected and lack explicit steps for a solution to be found. Ultimately, the multi-dimensional nature of the decision will also affect the airlines capital abilities, customers, competitors, and workers together with both the income and the economies of scale received from the operations (Ross, 2014). Notably, the decision to sell a frequent flyer program comes from the upper-level management and would have a long-term effect which is non-repetitive.

Recommendation on the Approach Which Should Be Considered

A rational approach to decision-making involves the usage of data analysis and facts together with an effective process of reaching a resolution. The functional decision-making method assumes that the one making the choice possesses comprehensive information about options and has the cognitive ability and resource to evaluate every choice against others (Kourdi, 2011). The steps that Alan Joyce will follow in his search for a solution include identifying and defining the Qantas airline problems, gathering information, analyzing situations, developing options, and alternatives. He will also have to contact an evaluation of any other issues within the company, choose the preferred possibilities, and finally act on the resolution.

It is significant for Alan Joyce, the CEO of Qantas airline company, to begin his rational approach to the process of finding a solution by identifying and defining the issue that the company is experiencing. The Australian Carrier is being faced with financial problems in its operations and activities which have emerged due to the increasing cost of fuel and slow growth of the world economy. This has made the Qantas commercial airline to lose money in the recent past.

The next step to be followed by the CEO, is gathering information and identifying the decision-making criteria. A collection of data comprises the procedures and activities taken into consideration to amass information which Qantas Chief Executive Officer needs to be aware of during the whole process. For instance, the benefits that Australian airline will get by managing their frequent flyer program and the impacts that the corporation will face when it decides to sell the program (Ironside, 2014).

For example, focusing on the customers, the competitors and the workers. Additionally, analyzing the situation involves evaluating the course of actions which are available and the types of data interpretation present. The CEO could use problem-solving activity that uses structured questions to encourage broad and in-depth analysis of the airline situation, while at the same time putting more emphasis criteria to be used (Buhler, 2001). For instance, find out what the companys effect would be, and which corporation dimensions will be affected by the decision. It is an exercise that will need time, patience and a deeper understanding of company operations.

The next step is developing options together with alternatives to solve the problem., which could be conducted through brainstorming activities. This stage will involve the generation of solutions to be taken into consideration to mitigate Qantas airlines financial crisis.

Evaluation of alternatives involves activities to determine the feasibility of options in the airlines situation (Buhler, 2001). Apart from the assessment deciding the acceptability and desirability of the choice, it will also do the crosschecking, which will realize the objective of solving the Airlines financial problem (Kourdi, 2011). Selection of the preferred option comprises the exploration of the provisional options for the potential outcomes. This step will explore the issues which are likely to emerge and affect the ongoing decision-making process. The last step of implementing the decision would involve the resources being allocated and the airline workers being guided in the direction of the accepted decision.

A Recommendation as to whether Joyce Should Use a Rational or Intuitive Approach

Due to the fact that the CEO has been working with the company for six years, I would recommend him to utilize the rational decision-making approach. Kourdi (2011) argues that sound decisions are reached at by following facts and reasoning founded on the thorough analysis of the facts. Therefore, the boss ought to adopt the usage of rational decision-making, which will involve systematically selecting the choice based on the Qantas airline executives experience to develop the solution to the financial challenges (Kourdi, 2011). The boss will implement and review several logical steps or actions. He will evaluate the reliable facts together with observations of the trends and developing potential results which can be grounded on the long-term services as the Chief executive officer.

Hence, if a new CEO comes from a different industry and does not have airline experience, I would recommend to him to use an intuitive decision-making approach. This is due to the fact that he may be lacking the capability that the current boss has. The conditions for intuitive decision-making are highlighted by Buhler (2001), which include the circumstance where the experience in solution-searching process and rapid response are called for.

The rational decision-making process relies on logic and quantitative analysis of data collection to decide whether to or not sell Qantas frequent flyer programs, and consciously embrace the assessing of the alternatives. Alan Joyce will also have the opportunity to formulate the main criteria for judging the projected results and weights of reflecting their relative significance. In contrast, the new CEO will be required to use an intuitive decision-making approach to solve the financial challenges that Qantas is facing.

Conclusion

The above case scenario has demonstrated the importance of decision-making process in business. Alan Joyce, the CEO of the Australian Largest Airliner was faced by a huge and complex issue of deciding whether to sell one of the carriers frequent and successful flyer program. The issue was resolved through conducting compressive brainstorming sessions, where the management had to assess and evaluate all the available options. In the end, it will be a relief for the outgoing CEO, because he will now retire knowing that he left the company in a good shape.

References

Australia: Qantas frequent flyer hits 10-million-member mark. (2014). MENA Report.

Buhler, P. M. (2001). Decision-making: A key to successful management. SuperVision, 62(2), 13-15.

Gilder, P. (2014). Loyalty future cloudy. The Gold Coast Bulletin.

Ironside, R. (2014). Qantas warned to ground plans to sell frequent flyer program. The Gold Coast Bulletin.

Kourdi, J. (2011). Assessing your decision-making style. In J. Kourdi, Effective Decision Making: 10 Steps to Better Decision Making and Problem Solving. Marshall Cavendish International [Asia] Pte Ltd.

Ross, K. (2014). Qantas CEO faces tough choices. Wall Street Journal.

Interpret the potential causes of resistance in the organization

Delta Airlines is one of the oldest operating airlines in America. The company plans to introduce new changes in its organizations to remain competitive in the industry (Dess & Lumpkin, 2014). Notably, it is very hard for the airlines to evade change. Through the intended changes, the firm can adopt innovative ideas that will boost its growth. Similarly, changes in the airlines will lead to acquisitions of new technologies, clients, and possibly employees. Through this, the company will be able to gain a competitive advantage in the airline industry and increase its productivity. Despite the associated advantages, it should be noted that the implementation of the changes would be met with resistance from the employees (Dess & Lumpkin, 2014). The potential causes of the resistance in Delta Airlines are fear of the unknown, poor communication, self-interest, feeling excluded, loss of job security, mistrust, bad timing, and personal predisposition towards change.

Potential causes of resistance to your change plan

The proposed amendments in the airlines are going to be affected by the above resistances. Three causes of oppositions identified are fear of the unknown, poor communication, and mistrust (Forsyth, 2012). If the planned amendments are implemented without informing the stakeholders about their benefits and effects, resistance will be unavoidable because of fear of the unknown.

The stakeholder may also oppose the planned changes due to mistrust. If the changes are going to be spearheaded by managers or employees who are not trusted by the employees, changes will be inevitable. For instance, if new managers who have not earned the confidence of the workers are mandated to oversee the processes they amendments will be met with massive resistance.

Similarly, the intended changes may face opposition due to poor communication. As such, information that triggered the planned changes, the importance of changes, and their effects should be communicated to all employees before the amendments are initiated (Forsyth, 2012). Also, the employees should be allowed to voice their views about the changes. Failure to implement good communication before the alterations will result in opposition to change.

Potential sources of resistance to your change plan

The three possible sources of the above resistance are employees, management team, and the stakeholders. The workers will oppose the planned the proposed amendments if the management team fails to inform them of the effects of the alterations. Similarly, the employees will resist the changes due to fear of the unknown. Middle-level managers and supervisors may oppose the planned change if they are not adequately informed about the benefits and effects of the amendments. Just like the employees, this management group should be thoroughly informed about the alterations before the changes are affected because they are going to play a crucial role towards the success of the initiatives (Forsyth, 2012). The stakeholders may also be a source of resistance to change. If they are not adequately informed about how the changes will benefit their investments, they may refuse to fund the planned changes.

A plan for minimizing possible resistance to change

To reduce the potential resistance to amendments in the airlines, those mandated to oversee the program should be timely, implement effective communication strategy, assess the readiness for change, and involve the employees. By accessing the organizations readiness for change, the executive will be able to identify when and how the alterations are to be executed. Through this, they will be able to publicize the looming changes at the right time.

By establishing an effective communication strategy, the executive will be able to communicate with the employees and the stakeholders about the benefits and effects of the impending changes. The executive will also be able to get feedback from the employees and the stakeholders about recommendations that lead to effective implantation of the changes.

Similarly, the plan will involve the employees in implementing the proposed amendments. The above will be done by asking their recommendations and integrating their ideas in the change plan. If the employees are involved in change management, they will understand and embrace the reasons for the planned changes. By being allowed to get involved, the workers will feel a sense of liability and proprietorship for particular portions of amendment initiative and be champions of the proposed modifications.

Relationship between resistance to change and communication

As indicated above, communication is a very vital component towards a successful implementation of change. An effectively planned communication program is necessary for the execution of change because through it workers and relevant stakeholders will be notified of the impending amendments (Baack, 2008). Thus, the above enlightening relationship of communication will influence worker willingness and approval for the change.

Evaluate three communication strategies

A communications strategy is a plan that indicates how the information will be swapped. Delta Airlines will utilize three communication strategies. They are verbal, nonverbal, and visual (Baack, 2008). Verbal approaches will comprise of written and oral communication. Printed strategies include e-mail, SMS, and chat. Verbal strategies involve oral talks, phone calls, video calls, and face-to-face conversations.

Nonverbal communication approaches comprise of visual signals like gestures and facial expressions, and tonal variations (Baack, 2008). Visual communication policies include emblems, webpages, and photographs. They can be used in the organization to attract attention and offer documentation.

Recommend one communication strategy that would apply to Delta Airlines

Verbal communication will be very effective for Delta Airlines. The strategy will enable the company to utilize emails, memos, oral talks, and face-to-face communication to inform the employees about the impending changes.

Why this communication strategy is best for Delta Airlines

The above approach will be suited for Delta Airlines. The company has over 80,000 workers worldwide (Jones, 2013). Therefore, the most effective communication strategy to be utilized in reaching out to such vast workforce is verbal communication. The company will use emails and memos to inform the employees spread across the globe about the benefits and effects of the looming changes.

Create a solid communication plan for your change initiative

The communication plan to be utilized by Delta Airlines will detail precise purposes and events of the approaching changes. The plan will be directed by verbal communication strategy. It will be premeditated to shape obligation for the change, decrease opposition, guarantee implementation transpires. Therefore, the communication plan would comprise of means of delivery, who, when and where to convey the intended messages.

Recommend two strategies for sustaining change

After Delta Airlines initiates the impending changes, it must adopt strategies to sustain the amendments. To achieve the above, the company should promote passion and measure and refresh the change throughout its phases of implementation (Forsyth, 2012). Generating passion ought to be a premeditated objective build into any strategy. If the executive were not passionate about the change, the employees also would not be enthusiastic about the alterations. Concerning this, the team mandated to oversee change implementation should encourage all the stakeholders to have passion in the amendments.

By continually measuring and refreshing the program, the team mandated to oversee change implementation will be able to sustain the initiatives. The strategy ensures that the progress of the program is continuously evaluated and supervised (Forsyth, 2012). Thus, breaches will be recognized to guarantee that the airlines possessions, savings, and information are safe into the future.

Diagnose the two theories from a scholarly perspective

The theories that will be utilized in the plan are punctuated equilibrium theory and Prochaska change theory (Forsyth, 2012). Punctuated equilibrium theory suggests that firms advance through eras of incremental change and times of renovation through which the profound systems of the organization are primarily transformed. The second theory suggests that persons pass through a sequence of steps when change transpires.

Why the strategies selected, are viable for the organization

The chosen strategies are viable for Delta Airlines. As such, the policies will encourage the employees and the individuals involved in change implementation to be dedicated to the program. Through this, the employees assurance that the amendment is real will be boosted. They will also have trust in the program and encourage them to dedicate their time towards the success of the initiative (Forsyth, 2012). The strategies will also offer workers rules so the employers will know precisely what is anticipated of them and how to concentrate their labors for maximum realization. Similarly, the policies will encourage them to feel a portion of the change procedure and bring ultimate accomplishment.

References

Baack, D. (2008).The Interpersonal Communication Process. Harlow: Pearson.

Dess, G., & Lumpkin, G. (2014). Strategic Management: Creating competitive advantages (7^thed.). Boston: McGraw-Hill/Irwin.

Forsyth, P. (2012). Managing change. London: Kogan Page.

Jones, G. (2013). Delta Air Lines. Charleston, S.C.: Arcadia Pub.

Introduction

Recruitment is the process of identifying a match between a candidates skills and the requirements of the position. Personnel selection in the organization  the actions of the recruiter in relation to the candidates, in which they select, select, and keep the most suitable, with the most experience and the best qualifications from among those presented. Inexpensive external sources of recruitment can include preliminaries. This method is considered labor intensive, as in most cases it is necessary to train and supervise a young specialist, and the number of analyzed resumes is below average. If a company has a well-developed training system, preliminaries are one of the most promising methods.

Discussion

The cheapest method of recruitment is recruitment by personal contacts and recommendations from employees working in the company. The disadvantage of this method is that there is a risk of hiring an unqualified employee without experience, moreover, the number of questionnaires, in this case, is limited to dozens. Social networks, and the Internet is the most current method of recruiting and selecting staff (Werner, 2021). This method is record-breaking in the number of analyzed resumes, (more than a thousand) the percentage of accepted questionnaires for further consideration. Nevertheless, the decision time in this source is considerable in comparison to the first two sources.

The most common methods used in personnel selection are the interview or the interview. During this procedure, the employer tries to get as much information as possible. Based on the experience of various organizations, one can conclude that the results of the first interview of the same person can be completely opposite with a second session (Kas1m Kirac1 & K1ymet Tunca Çal1yurt, 2022). Consequently, this method is not objective enough and time-consuming.

An equally used method is the questionnaire, which is necessary to check the knowledge, experience, and achievements of the future employee. Questioning is conducted in the form of a test or assignment. After the questionnaire, the recruiter makes a conclusion about the candidate. The main difficulty in developing tests and questionnaires is the development separately for each position. However, the accuracy of this method is much higher than the previous one.

The three main methods of selecting pilots are the technical interview, individual psychological testing, and team aptitude testing. All of these methods are legitimate and meet ethical criteria. In terms of usefulness, each of the methods of pilot evaluation is of particular importance. Technical interviews help assess basic training, while psychological testing allows the manager to predict the candidates actions in stressful situations. Teamwork skills testing is necessary to understand the pilots subordination and delegation skills. All methods are reliable because they are based on clear quantitative criteria (Kas1m Kirac1 & K1ymet Tunca Çal1yurt, 2022). Validity is least assured in psychological testing, where the sub-subjective factor is most important. Improving the quality of aviation personnel training involves the use of modern integrated simulators for training flight and control personnel and practicing the skill of parrying possible special situations. Moreover, the use of modern means and methods of control of the crews actions in flight, as well as the development of high-quality flight operation documentation and training programs for aircraft crew members are popular.

In order to organize flight crew training in accordance with international standards it is important to recommend to airlines to work on simulators, which is the most effective, but at the same time the most expensive. An important aspect of training is the organization of control over the current activity of personnel, but this approach has great risks in terms of efficiency because subjectivity begins to play a role. The third recommended method is acquaintance of employees with regulations and documentation, but such work is not always effective because it is monotonous.

Balanced Scorecard system makes the whole strategy of the company transparent to all participants of the management process. The system of KPI (key performance indicators) and their target values makes business strategy available to all participants of the management process. The use of such a system makes it possible to eliminate possible discrepancies between the corporate strategy and management methods applied at different levels of the enterprise (Werner, 2021). The recommended method for Southwest Airlines is to work in the KPI system, as it is more valid and reliable due to the prevailing quantitative assessment. Ensuring the congruity of this system is possible due to the careful development of the criteria system. Moreover, this system forms a very clear hierarchy in the delegation of authority and helps to control the process of achieving the global goal of the Company.

Conclusion

The main ways to reduce staff turnover include ensuring quality recruitment, programs for professional and career development of employees, as well as an open system of remuneration. All of them are effective only when they work together. If quality recruitment is not implemented transparently, the company can develop an unpleasant reputation among competitors. At Southwest Airlines, special emphasis can be placed on developing a corporate culture. While receiving a high salary in a developing company, it will be important for employees to understand that they are part of the mission, share the main values, traditions and rituals of the organization. This factor is important for those companies where the pilot already feels financial and basic psychological satisfaction.

References

Kas1m Kirac1, & K1ymet Tunca Çal1yurt. (2022). Corporate Governance, Sustainability, and Information Systems in the Aviation Sector. Springer Nature.

Werner, J. (2021). Artificial Intelligence in Human Resource Management. Opportunities for the Aviation Industry. GRIN Verlag.

Abstract

Mergers and acquisitions are common business practices that have both benefits and disadvantages to the involving firms. Essentially mergers and acquisitions are often perceived as expansionist strategies employed by firms to ensure increased market share and capabilities. Firms merge and acquire others for various reasons. However, increased competencies and capabilities, which in turn lead to augmented competitive advantage and market share, forms the main basis for mergers and acquisition.

Mergers and acquisition and business practices common in a highly competitive industry. In such, industries, large firms acquire smaller ones to reduce intense competition. Similarly, firm merge with other companies of equal sizes forms a formidable force against any form of competition within the industry. The merger between American Airlines and US Airways was attributed to various reasons, particularly countering intense competition and increase capabilities in several fronts.

Introduction

The US Airways and American Airlines officially merged on December 9, 2013, to become the American Airlines Group, Inc. The publicly traded holding firm has its headquarters in Fort Worth, Texas. With the merger, the American Airline Group has been touted as the largest airline company with over three hundred destination hubs around the globe and operating in over fifty countries.

Even though the merger has been publicized as the most successful, it has been received with mixed reactions, particularly concerning the possibilities of creating an airline monopoly. However, the merger of the two firms has presented opportunities as well as benefits not only to the firms but also to the airline industry (Shlleifer & Vishny, 2006). The American Airline Group Inc. has increased market share, and improved competencies, including financial, managerial, and technological that have resulted in increased competitive advantage.

Reasons for the Merger between American Airline and US Airways

As indicated, mergers involve the acquisition as well as the combination of two firms. In the case of acquisitions, one firm absorbs the other completely. However, in combinations, merging firms transfer or combine their operations (Shlleifer & Vishny, 2006).

In this case, the American Airlines and US Airways combined to form a larger firm known as the American Airline Inc. the main driver for the merger of the two firms within the industry was to cut costs as well as gain bigger market share. Essentially, the two firms merged in order to cut operation costs. Further, in order to bring American Airlines out of insolvency, the amalgamation was inevitable.

Reduced Costs

One of the reasons why the two firms merged was to reduce the cost of doing business (Holmes, 2006). The cost of operations in the industry is constantly increasing, particularly due to the general escalations of global fuel costs. The combination of the firms operations will ensure efficiency in the use of resources, which result in cost savings as well as benefit from the economies of scale. The resulting firm, which is American Airlines, is expected to benefit greatly increased efficiencies resulting from the elimination of duplication of functions.

Cost reduction measures could have been the motivating factors behind the two firms merging to form the larger firm relevant in the aviation industry. The firm that has benefitted hugely from the merger is the American Airlines that was struggling with issues of bankruptcy. Besides, the firm was almost becoming un-operational following the grounding of several planes. However, with the merger, the firm revamped its operations due to the availability of finances and increased capabilities.

Increased Market Share

The clients of the two airlines are expected to be part of the larger clients base of the new firm. The two airlines claim that the merger will create an increased value of services to the customers (Perry & Porter, 2005). With the merger of American Airlines and US Airways, travelers are expected to experience several changes.

The merger is also expected to bring the clients of the two airlines together. The expected changes include improved services delivery, reduced costs, and efficiency in the provision of services. The competencies are expected to increase the competitive advantage to the firm. American Airline Group Inc. is expected to be highly competitive due to improved capabilities.

Essentially, the merger means that the new-fangled mega-airline firm would have many flights as well as flight routes. Besides, travelers would be offered with the required expediency and comfort. In other words, even though the travelers may pay relatively higher prices, convenience, and comfort offered by the American Airlines Group Inc. would be appealing to the customers. Generally, the two airlines combined with having increased market share, which in turn would result in improved revenue.

Effects of the merger

Even though mergers are often criticized for resulting in monopolies, the combination of the two airline firms had positive effects in the industry. The first positive outcome of the merger is an improvement in the clients services. For instance, the clients will have various alternatives given the fact the new firm would have many flights as well as flight routes. In essence, clients would be offered with the required expediency and comfort.

The improved services result from improved capabilities ranging from the availability of finances to the managerial skills (Holmes, 2006). Therefore, improved clients services are one of the positive outcomes of the merger between the two airlines. However, improved services are normally accompanied by higher prices. In other words, even though the travelers may pay relatively higher prices, the improved services offered by the American Airlines Group Inc. would be appealing to the customers.

Secondly, the merger of the two Airlines has strengthened the position of the American Airlines Group Inc. in the highly competitive global aviation industry market. Essentially, the merger has provided the new firm competitive edge to capture the global market share. The new firm is facing stiff competition from larger and well-established global firms within the US market alone.

Airlines such as Delta Airlines and the United Continental holdings offer excellent services and have improved capabilities, which enable them to capture a large percentage of the market share. However, within the global market, the competition would be stiff due to the availability of more excellent firms such as British Airways.

However, with the merger, the new firm has improved product and services offering, which increases its competitiveness in the market. For instance, the improved onboard services and luggage delivery time has enabled the new firm to penetrate various markets across the globe.

Besides, the new firm, American Airlines Group, is currently considered the worlds biggest Airline Company based on passenger traffic. Essentially, the increased competitive edge has enabled the firms rapid expansion and capturing a sizable market share within the global aviation market.

The Organization Structure of American Airlines Group Inc

Mergers are normally a gradual process (Gowrisankaran, 2009). In other words, mergers normally take time before it is completed. The reason is that it is not easy to diffuse the operations of the original firms and to come up with a new corporate structure. In most cases, the two firms agree on a hybrid structure that results in increasingly competitive advantage (Gowrisankaran, 2009).

In this case, the two merging companies agreed that the new firm, American Airlines Group, have a hybrid corporate structure adopting the management styles of both firms. The management structure involved the transfer of assets, liabilities, staffs as well as other operations of the two firms.

Besides, the clients of the two airlines are also expected to be amalgamated. Moreover, how the shareholders are to be merged and managed is also outlined (Holmes, 2006). For instance, American Airlines Corporation shareholders should be provided with approximately seventy-two percent of the new companys shares while the remaining shares are to be given to the US Airways Group. The apportionment of the shareholders meant a different corporate structure.

The structural management ensured that the US Airways management team would have the most of the operational management positions while US Airways Group is having the chairperson and chief executive officers positions. The positions were distributed accordingly in the new corporate structure.

There seem to be minimal changes in the merged company as compared to the organizational structures of the two predecessors. However, in an attempt to accommodate the huge number of employees, several adjustments were made into the organizational structures of the original firms to come up with an elaborate structure. Essentially, changes in the management of the firms were critical for the success of the new firm (Perry & Porter, 2005)

The Modification of the Human Resources

The changes in human resources were necessary to accommodate the new transformations in the management of the new team of managers. Generally, the American Airlines Group had to come up with new human resources management structure and practices to accommodate a new management style, a huge number of employees, and the required goals and strategies.

In the new management, the human resources ensured the training and development of the employees and aligned the needs and goals of the organization with the requirement of the employees. For the new resultant firm to succeed, it was necessary to change the management style of employees that would see the attainment of the goals. Perry and Porter (2005) argue that changes in the management of employees are critical for the success of horizontal mergers.

Conclusion

Mergers involve the acquisition as well as the combination of two firms. In the case of acquisitions, one firm absorbs the other completely. However, in combinations, merging firms transfer or combine their operations. Firms often merge to cut costs as well as gain a bigger market share. For instance, America Airways merged with US Airlines to cut operation costs.

Further, to bring American Airlines out of insolvency, the amalgamation was inevitable. However, the merger of the two firms has presented opportunities as well as benefits not only to the firms but also to the airline industry. The American Airline Group Inc. has increased market share, and improved competencies, including financial, managerial, and technological that have resulted in increased competitive advantage.

References

Gowrisankaran, G. (2009). A dynamic model of endogenous horizontal mergers. Journal of Economics, 30(16), 56-83.

Holmes, T. (2006). Can consumers benefit from the policy limiting the market share of a dominant firm? International Journal of Industrial Organization, 14(2), 365-387.

Perry, M. & Porter, R. (2005). Oligopoly and incentives for horizontal merger. American Economic Review, 75(14), 219-227.

Shlleifer, A. & Vishny, R. (2006). Large shareholders and corporate control. Journal of Political Economy, 94(6), 461-488.

Introduction

A deeper understanding of the individual an organization is trying to reach is required for personalization and segmentation. It is the breadth and scope of that knowledge, as well as how it is put to use, that makes all the difference. Also known as one-to-one or individualized marketing, personalized marketing uses digital systems and information analysis to develop customized product offerings, messaging, and outreach to current or potential consumers. In contrast to market segmentation, customer experience (CX) personalization focuses on a single customer (Krämer, Friesen, and Shelton, 2018). When it comes to personalization, it all begins with a greater understanding of the individuals organizations seek to reach with digital technologies.

Personalization in the Airline Industry: Examples

Personalization is already having a positive impact on leading carriers. Airline companies like Air France, British Airways, and Transavia are already reaping the benefits of implementing at least one of the personalization strategies. Transavia is committed to providing exceptional service to all of its passengers. Customers data is used to identify passenger demands before, amid, and after a flight using a unified engagement platform. Transavia can use its Pega CRM platform to communicate with clients early in their journey. Passengers will have a remarkable voyage thanks to the recommendations made based on data and context (Buyruk and Güner, 2021). Apart from customer satisfaction, personalization provides Transavia with an edge in the market.

Air France-KLM developed ICARE Customer Intimacy to ensure that over one million passengers receive outstanding service and seamless travel experiences. Both airlines are committed to making every flight a pleasant experience for passengers. Disruptions like bad weather or equipment malfunctions should be seen as opportunities to change disgruntled passengers into satisfied ones. For this, they empower personnel with an extensive client profile and provide proactive, on-the-spot service tailored to each passengers culture, preferences, and present interaction environment (Michalski et al., 2020). Personalization has enabled Air France-KLM to unify operations across the company, boost agent efficiency, and deliver consistent performance.

Because of British Airways proactive, one-on-one contact with passengers, the airline has increased customer loyalty and satisfaction. That is a significant undertaking for a company that deals with over 400 million customers each year. British Airways streamlined personalization by embracing a single customer perspective, an omnichannel approach, a central decisioning framework, and new key performance indicators that concentrate on the uplift achieved by personalization. Changes in thinking and organizational approach to prioritize customer outcomes equally as company success was made (Zhao, Cui, and Cheng, 2021). There is an improved comprehension of their clientele, an increase in conversational engagement, and an overall improvement in service quality.

As a Marketing Strategy, How Successfully Has Personalization Supported the Brands of the Examples?

The Accenture Aviation Experience Accelerator (AAEA), built on Pegasystems software, was designed in close collaboration with Transavia, starting with the companys vision. Analytics, digitization, cloud, and mobile expertise have cut costs, increased revenue, and enhanced on-time productivity in the airline business. Data, customers, staff, and business partners are all connected on the AAEAs single platform, which helps the airline streamline its procedures, sales, and services. By integrating real-time information from processes, customer service, promotion, and sales, Transavia enhances passenger travel experiences and improves operational efficiency (Schmalz, Ringbeck, and Spinler, 2021). Additionally, personalization has enabled Transavia to enhance the AAEAs development for the aviation sector.

When Air France-KLM collaborated with Pega, they created a solution called ICARE, which connects the dots and helps them improve their personalized customer service. Instead of only focusing on agent demands, they required a solution that could handle all of the companys service recovery efforts and address every issue that arose. A professional team of employees handles the in-flight and ground services of Air France. Because of this network, travelers can expect consistently high levels of service and pleasure (Hammoud, Tawfik, and Fahmy, 2018). Air Frances employees have access to various training programs to provide customer loyalty services. The organization also conducts various in-house education programs to ensure that its personnel is well-versed in dealing with difficult and unexpected scenarios. Over 84 thousand devoted workers work year-round to ensure that the companys yearly passenger volume of 50 million is met with nothing but excellence.

Customer support from booking a ticket to the passengers journey to their final destination is provided by Air France. The airline provides guests with French-themed services at the airfield and aboard the plane. Seating arrangements, services, and the enthusiasm of airline staff and passenger desk assistance play a vital part in determining the airlines perceived image (Vojtek and Smudja, 2019). Customer satisfaction is a top priority for Air France and its affiliates. Additionally, the airline has been retooling its planes so that customers can enjoy an enhanced flying experience.

While flying and moving about London and the rest of the world, British Airways senior managers make an effort to meet and greet many of their passengers. The airlines customer forums help it enhance its services and identify solutions that it should contemplate developing in the future. Using these platforms, British Airways encourages customers to express their views and feelings about current and emerging concerns by allowing their imagination, fury, enthusiasm, and ideas to flow. The airline management believes they have gone beyond other organizations in the field to establish new ways of listening to customers (Ettl et al., 2020). In addition, they are looking for guidance that many service organizations overlook: client complaints, ideas, and compliments as they hope to learn from these sources. The airlines complaint department has been renamed a unit that aims to keep consumers happy. A crucial part of its value-driven consumer engagement strategy is making British Airways as approachable and responsive as possible to its customers. The companys approachability and responsiveness highly influence customer loyalty.

What Can Be Gleaned From Both Achievements and Failures?

There is a need to be creative, goal-oriented, and swift on ones feet when working at Transavia. Knowing when to delegate and when to bring in marketing technology is an important part of being a marketer, as it allows for greater efficiency in achieving ones goals. Finding a strategy to make Transavias brand stand out in a crowded market was one of the problems to overcome. Several low-cost airlines operate in the aviation industry, making it difficult for Transavia to compete. Every year, with limited resources and constant pressure on ticket pricing in this fiercely competitive industry, its team strives for better results (than in prior years) (Al-Azab and Mohamed, 2021). As a result, they must be more innovative and successful in all aspects of business, including advertising.

Personalization is the core tech for AAEA, and Transavia has chosen the Pega Platform from Pegasystems. The Pega Platform is a single policy that combines leading artificial intelligence and decisioning, business process management, omnichannel user experience, case administration, digital and robotic automation. The current airline market necessitates CEOs to look for creative ways to win back customers trust and loyalty (Kelemen et al., 2019). Transavia, for example, differentiates its brand by providing exceptional customer experiences that directly correlate with company objectives thanks to its innovative solutions.

Being recognized as an individual has an emotional impact unlike anything else, regardless of age. Security and significance are the two most fundamental needs of all humans. People want to be respected for who they are, as well as safeguarded. A one-on-one relationship is the only way to achieve this outcome (Quach et al., 2020). A successful marketers goal should be to use the tools at their disposal to develop genuine connections. Consequently, customer experience personalization is the greatest strategy for expanding companies.

In the same way as other successful airlines, Air France-KLM has strived to give an excellent customer experience. Disruption, however, is a possibility; flights might be delayed, and bags can go missing. This is where Air France- KLMs exceptional customer service can make a big difference and keep consumers coming back, which denotes a paradox of recovery. For Air France-KLM, personalization is essential to transforming passengers into satisfied customers and advocates. The airlines front-line employees who interact with consumers face the challenge of providing them with rewards, tickets for their next flight, and the most excellent deals they can offer (Stone & Woodcock, 2021). With increased personalization, airlines will not have to ask passengers to fill out an application on their website for enhanced services.

The airline industry is one of the most competitive in the world. Customers should not be treated harshly simply because competition is fierce. Many airlines, particularly those in the United States, appear to have prioritized cost-cutting over service quality because they believe that pricing is the most important consideration for customers. It is still possible to find customers willing to fork out a little extra money for a fantastic experience, even if they are flying economy (Price, De Lille, and Bergema, 2019). Looking at what personalization has made British Airways, Britains national carrier, achieve shows that it has managed to turn a huge profit during a difficult period for the global airline business.

Although air travel appears to have a standard price, some travelers are ready to pay a premium for better service. They are the people that airlines have been working hard to win over and keep as clients. People who travel in first class, business class, or even on the Concorde are not excluded. However, many customers at the lower segment of the scale are also prepared to pay a little extra for better service but are often overlooked by service providers (Weller, 2019). It is often difficult to pin down which engagement or series of connections led to a customers level of satisfaction or dissatisfaction throughout a service company experience. Customers may sometimes have a terrible experience due to events out of control, such as a delayed flight associated with bad weather or issues with air traffic control. This makes it difficult to tell if a customers complaint stems from a single incident, like a terrible day at work, or if it is a sign of a more significant problem.

Ensuring that a company excels at attending to its clients, its most important people, helps to improve performance, identify challenges, and address any weaknesses using data while also measuring the types of services that add value for those customers. When an airline realizes that its customers are its most important asset and that its employees play an essential role in creating value, it easily helps them achieve their goals. The consumer is at the center of everything airlines do, from their advertising to their business model and the metrics that quantify their success. Supplying people with beliefs, ideals, and feelings alongside the rendered service means that establishing a company culture around the brand is critical. Because of this experience, it may be understood that the service is more than just a seat; it is an entire airline journey (Sarwar and Fraser, 2019). Tackling consumer complaints is a great way to keep customers who may otherwise go elsewhere without the airline finding out about issues that ought to be addressed. As business owners, airline managers benefit from customers who take the time to voice their dissatisfaction with its products or services.

Employee training, nurturing, and leadership is critical to delivering lasting and constant personalized value in a service-based business model. When hiring new personnel, successful airlines follow a strict procedure. In addition to evaluating resumes, they conduct psychological evaluations, group activities, and one-on-one discussions to elicit information about potential candidates. Leadership is just as vital, and thriving managers are regularly taught management and service strategies to ensure that their customers are always satisfied (Jagtap and Larsson, 2019). When the performance criterion for each team has been determined, airlines outline their key performance indicators. Such indicators are based on the personalized performance levels airlines need to maintain to attract repeat business and keep customers coming back. They ensure that facts are given precedence over personal biases. Nonetheless, some airlines fail because they do not take personalized procedures as seriously as Air France, British Airways, and Transavia.

Customer satisfaction can soar to new heights when airlines respond favorably and immediately to their individual needs. Because an organization like Air France, British Airways, or Transavia cannot avoid service interruptions, it is crucial to focus on disaster recovery and provide excellent and personalized customer service. Airlines should expect all of their employees who contact consumers to be empathetic and quick to respond to any problems that may emerge (Jain, Paul, and Shrivastava, 2021). What matters most is what airlines do when errors occur, even if it is inevitable that some services may go awry from time to time.

The Future of Personalization and Ramifications for the Airline Industry and Passengers

Big data and perfect decisioning systems will continually be used by airlines that want to keep generating customer loyalty and value to interact with each consumer on a tailored, one-to-one basis. They will do this in three ways in the future, the first of which will be to make every passengers journey unique. Personalized offers, communications, and recommendations will be provided by airlines based on an understanding of each customers travel tastes and needs (Weller, 2019). An airlines customer service staff will offer specialized in-flight recreation or know if an individual traveler frequently checks their bag or gets a special meal to understand their habits better and build long-term customer connections.

Second, service interruptions will be turned into opportunities to serve customers better by focusing on the individual. Increasingly, airlines will go out of their way to assist passengers in resolving their issues and reducing the effects of travel delays; they will not merely handle new flight information (Al-Azab and Mohamed, 2021). Machine learning insights will be combined with customer and logistics data to assist personnel takes preemptive actions that are best for each passenger. Even if a lengthy delay due to bad weather may be inevitable, future airlines will resort to such practices as giving a coupon for a free meal to an anxious customer waiting at the gate. Such forms of personalization are the ones that will encourage customers to stick with airlines.

Thirdly, customized offers will increase revenue and satisfy clients if they are used consistently. Customers seldom respond to non-personalized offers or campaigns if their messaging does not resonate with them in a meaningful way (Stone & Woodcock, 2021). Intelligence and smart decisioning will help airlines identify clients with a high propensity to buy so they can give the right offer to them at the most opportune time, appropriate place, and when they will be listening attentively and ready to spend. For example, airlines might distinguish vacation packages suggested based on previous purchases or seat-specific deals on the screen. Revenue per customer rather than per seat will be the new norm. Selling, maintaining, and nurturing relationships will be the primary goals, as will increasing the number of miles covered year over year based on the individual needs of the people who use the service.

Fourth, airlines will become brands that provide personalized experiences instead of just transportation services. Successful airlines will do this through the implementation of personalization. When it comes to gaining customer loyalty and market share, those who treat each traveler as a distinct individual will be the ones who succeed (Jain, Paul, and Shrivastava, 2021). In addition, as technology advances, so will this customer service strategy centered on people.

Conclusion

Personalization and segmentation are only possible with a thorough understanding of the target audience. The depth and breadth of that knowledge, as well as the application to which it is put, are what matter most. Digital systems and information analysis are used to develop customized product offerings, messaging, and outreach to current and potential customers, as well as one-to-one or individualized marketing. Having a better grasp of who airlines are trying to reach with digital technology is essential to personalization. Leading carriers have already felt a positive impact of personalization. Airlines like Air France, British Airways, and Transavia have already implemented one or more of the personalization strategies.

Air Frances employees can provide personalized customer loyalty services thanks to a variety of training programs. For this reason, the company offers a variety of in-house training courses to its employees, who are expected to be ready for any situation that may arise. Senior officials in British Airways management make an effort to meet and greet as many of their passengers as possible while flying and traveling around London and the rest of the world. British Airways encourage customer imagination, rage, fervor, enthusiasm, and ideas to flow through existing channels to enable the airline to address current and emerging issues effectively. When airlines respond quickly and favorably to their clients individual needs, customer satisfaction will soar to new heights.

Reference List

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Introduction

Ever since the introduction of open skies policy, a policy that permits unrestricted flight of airlines across continents, the overall scale of competition has intensified. Besides the enactment of the policy, the airline industry has also experienced a shift in consumer dynamics. Presently, consumers have become concerned about the quality of services that they receive to their prices. As such, airlines are currently lowering their cost of operation, adjusting their flight schedules, and increasing the range of their service offerings in an attempt to match the market dynamics. One of the areas that gave some airlines a higher market share as compared to their competitors is the use of digital platforms. Evidently, the airlines that have demonstrated exceptional use of the promotional media include Qatar and Emirates. Both airlines have been classified to be among the leaders in social platforms, which use client feedback to make their ratings. It is within this context that this paper compares the use of promotional strategies between Qatar and Emirates airlines and assesses the effectiveness of the strategies.

Body

Qatar and Emirates Airlines

Established in 1993, Qatar Airways, or airline, which is fully owned by the state of Qatar, has risen to be one of the leaders in the airline industry. The airline employs more than 45,000 human resources who work directly or indirectly. Due to its superb services, the airline has expanded to all the continents of the world and currently travels to over 150 destinations and has more than 200 aircraft. According to Dresner et al. (2015), Qatar Airline has improved the quality of services from those offered by Boeing 727 in 1996 to the high-end services provided by its modern Boeing 787 dream-liners. Currently, the services offered by the airline have not only posed serious competition for airlines in the UAE but is also threatening many airlines in Europe and the United States. Research by OConnell and Bueno (2016) indicates that Qatar Airline tops the list of client ratings about the nature and quality of services offered by its cabin attendants.

Based in Dubai, Emirates Airlines has a rich history, which dates back to 1985 when it first began its operations. During its inception, the airline acquired training and its first aircraft from Pakistan Airline. Thereafter, the airline has grown to surpass a number of its competitors. Its series of acquisitions, leases, and purchases made the airline a leader in the industry with more than 100 fleets of Boeing 777-300 and Airbus A380-800, which are among the coveted planes in the aviation industry. It is important to note that the airline began its operations after Gulf Air minimized its services in the Middle East. Although the company used to provide the longest journey to travelers from Dubai to Auckland, Qatar Airline later surpassed it after introducing flights from Doha to the same destination. Dresner et al. (2015) explain that the scale of competition between Qatar and Emirates airlines is long-lived and is among the factors that have facilitated their growth. The almost simultaneous growth of the two airlines compounds the fact that their regional competition has a close relationship with the evident progress.

Types of Media and Promotional Strategies used by Qatar and Emirates Airlines

Both Qatar and Emirates airlines use several media to promote their products to its wide spectrum of customers around the globe. Fundamentally, while some types of media are regional, others are far-reaching and useful when the company needs to target several clients. According to Armstrong et al. (2015), leaflets, magazines, and brochures are effective when the airlines target a certain set of customers who can access print media. However, to get the attention of several clients, the airlines place their media on online platforms such as YouTube, Facebook, and Twitter as well as offline platforms such as televisions. Videos, audios, and pictures of their new products are usually placed on the airline sites and affiliate websites.

Paid, owned, and earned adverts on online and offline platforms play a pivotal role in relaying information to the airlines potential clientele. Remarkably, a combination of the right media and a good strategy goes a long way in improving the performance of a company in the market (Lohmann & Spasojevic 2018). As such, by employing media such as videos, audios, pictures, leaflets, and placing them in online and offline platforms, Qatar and Emirates airlines continue to enjoy a high market share globally. To understand the importance of choosing the right media and strategy in product promotion, the paper delves into the new products introduced by Qatar and Emirates airlines and examines their effectiveness. It is worthwhile to elucidate that a larger part of the campaigns undertaken by Qatar and Emirates airlines revolved around online platforms. The focus accorded to online campaigns took effect because of their power to convey messages to millions of consumers in various parts of the world.

Promotion strategies used by Qatar Airline

Recently, Qatar Airways introduced a new type of seats also known as Qsuites. The suites are high-end and intended to improve customer satisfaction especially among those who are traveling for long hours. To promote the new product, the airline had to devise a strategy that could employ far-reaching communication media. It is worthwhile to assert that in modern times, online platforms play an integral role in communicating new products to millions of clients across the continent. Therefore, any media selected by the airline had to align itself with online platforms as well as some far-reaching offline platforms. Besides placing the new product on its social platforms and websites, the airline also launched the product and invited the media on a tour of the new Qsuite seats.

Mutzabaugh (2018) elucidates that by inviting the media on a tour, the company successfully had the images of its high-end products relayed to the potential customers in the United States and around the globe. Furthermore, the airline also placed videos on online platforms where potential clients could see demonstrations and the comfort derived from the new Qsuite seats. From websites such as the one advanced by Mutzabaugh (2018), it is clear that the airline chose the right media to communicate to its potential clients and utilized a superb promotional strategy. With the right media and excellent strategy, the company expects to increase its market share and outsmart its competitors.

Promotion Strategies used by Emirates Airline

Just like its close competitor, Qatar Airline, Emirates Airlines launched its new and amazing suites in its first and business classes. The suites are not only exceptional but are also eye-catching and comfortable. According to Talib (2017), the suites rate among the best around the globe and match the desires of modern travelers. The offerings such as food, entertainment, and an internet connection, which come along with the suites, play an instrumental role in ensuring that travelers enjoy their time all through the journey to a destination of their choice. Issues such as privacy and comfort topped the list of factors considered during the design of the magnificent suites offered in the airlines Boeing 777-300ER. After its launch that occurred in Dubai, the first set of passengers to experience the suites were those traveling to Brussels on 1st December 2017.

To ensure that its new product reached a majority of target customers, Emirates Airlines launched its product in an event that succeeded a period of extensive promotion. Prior to the launch, the airline had announced that it would unveil new and exceptional suites that were unmatched by its competitors. Therefore, the launch came as a timely event after a period of waiting generated by the announcement, which initiated curiosity among prospective clients. Mutzabaugh (2018) alludes that curiosity is one of the promotional strategies that smart managers use to ensure that new products acquire the desired attention from potential consumers. Therefore, the timely launch of the new suites in Dubai led to positive reviews on the Airlines website and other online platforms. During the launch, a set of clients got the opportunity to view the suites and even experience the comfort that travelers using the airline would enjoy. Moreover, the media got a chance to take pictures as they enjoyed a guided tour around the aircraft.

Fundamentally, the guided tours did not only take place in Dubai but also occurred after the first set of passengers alighted at Brussels. At Brussels airport, the media, stakeholders, and VIP customers got the chance to tour the suites and assess their quality. It is important to explain that by giving the media, the stakeholders, and some clients the chance to assess the suites, the airline focused on winning the hearts of potential clients through word-of-mouth marketing. Essentially, word-of-mouth endorsement emanates from customers who get the chance to check products from an organization and examine whether they match their pre-consumption expectations (Armstrong et al. 2015). When products match consumer expectations, organizations such as the Emirates Airline are likely to increase their market share.

Moreover, by inviting the media, images of the suites would be relayed through online and offline platforms. By relaying the information, the media would market the new suites and in turn, persuade potential consumers to use the airline. After its launch, the airline posted videos and pictures on the YouTube platform, its website, and its social sites. According to Talib (2017), the purpose of the videos and pictures was strategic and focused on ensuring that the new product attained the desired promotion and reached a wider set of consumers around the world. Moreover, the website of the company gave its visitors the chance to have an online tour of the aircrafts cabin and make their decisions on the quality of the suites. To ensure that the visitors got an almost accurate online tour of the suite, the airline used a combination of high definition videos and pictures. Therefore, it is clear that like its competitor, Qatar Airline, Emirates Airlines utilized various types of communication media in a strategic and persuasive manner.

Effectiveness of the Strategy

In as much as the communication and promotion strategies used by both Qatar and Emirates airlines are superb and persuasive, they still have some areas of weakness. The areas of weakness or parity revolve around the nature of messaging information and the succession of the two strategies. Messaging is one area of parity evidenced by how the airlines convey their messages to the potential customers. While the use of online campaigns to market new products is far-reaching, airlines need to focus on offline platforms. It is notable to state that offline platforms are more credible before some conservative sects of customers. Although online campaigns, which utilize platforms and media such as YouTube, Twitter, and Facebook, may appeal to modern and dynamic clientele, conservative individuals may not receive the message from these platforms positively. As such by paying lots of focus on online platforms, the airlines downplay a sect of conservative clients who are equally important in augmenting their market share.

Consequently, the products introduced by both airlines as new are similar and appear as if Qatar copied the suites introduced by Emirates. After Emirates Airlines introduced its product in 2017, Qatar Airline made its introduction in 2018. The implication of the succession is a feeling that Qatar is not innovative, a sentiment that may affect the overall reputation of the airline. Presently, several customers who air their opinions using online platforms cannot provide a clear distinction between the services offered by the two airlines. The absence of a clear difference between the two airlines from the passengers intending to use them emanates from their successive introduction of similar products and services.

Notably, some of the recommendations that can help the airlines improve their services and product offerings include continued research and pricing. The essence of continued research stems from the ever-changing customer needs and the intensifying competition from airlines based in Asia, Europe, and the United States. Without continued research, the airlines may fail to notice a shift in customer preferences or new offerings from its competitors, a phenomenon that can adversely affect its position in the aviation industry. Moreover, the airlines need to work on their prices so that they reflect utility for the money paid by clients. Although the current pricing of the two airlines is relative, other competing airlines pose a threat that they cannot underscore. A change in price, especially in the face of the cutthroat competition, can have dire implications on the reputation and market share of organizations. Therefore, pricing is a factor that Qatar and Emirates Airlines need to check frequently to remain relevant and dominant in the market.

Conclusion

Qatar and Emirates airlines are carriers that provide similar services to a wide spectrum of customers. The two carriers have gradually used online campaign strategies to reach their customers located in various parts of the world. Some of the media that the airlines have used include print, audiovisual, as well as online platforms. By using the media, the airlines relay their messages to their target clients and communicate any new service or product to them. The new products introduced recently by the airlines became successful only after they introduced them into the online platforms and gave prospective customers an opportunity to have a look at them and evaluate their respective qualities. It is important for airlines to continue engaging in extensive research so that they sustain the delivery of high-end products that match consumer expectations.

Reference List

Armstrong, G, Kotler, P, Harker, M & Brennan, R 2015, Marketing: an introduction, Pearson Education, London.

Dresner, M, Eroglu, C, Hofer, C, Mendez, F & Tan, K 2015, The impact of Gulf carrier competition on US airlines, Transportation Research Part A: Policy and Practice, vol. 79, no. 1, pp.31-41.

Lohmann, G & Spasojevic, B 2018, Airline business strategy. The Routledge Companion to Air Transport Management, Routledge, New York, NY.

Mutzabaugh, B 2018, Qatar Airways luxurious new Qsuite seats now flying from the USA, Web.

OConnell, J & Bueno, O 2016, A study into the hub performance Emirates, Etihad Airways and Qatar Airways and their competitive position against the major European hubbing airlines, Journal of Air Transport Management, vol. 1, no. 1, pp. 17-31.

Talib, M 2017, Emirates introduces new range of comforts in First and Business Class, Web.

Introduction

Change is a common feature in organizations. The capacity to handle such changes is the core competence of success in organizations (Weick & Quinn, 1999, p. 362). Over the last two decades, the main drivers of organizational changes have been technological advancements, stiff competition, and fluctuations in the global economy. This has led to the exploration of mechanisms for achieving competitive advantage through increased radical forms of change (Reichers, Wanous & Austin, 1997, p. 50).

In the context of business survival, growth and normal operation, it is imperative to respond to transformational processes and explore the available opportunities. The current competitive business environment calls for high level of flexibility, based specifically on human resources. Therefore, human resources are considered as a significant asset capable of enforcing change in organizations. This is partly due to the fact that employees are the custodian of organizational values, which is one of the principal strategic elements determining companies potential (Kaplan &Norton, 1992, p. 74).

Therefore, employee resistance has been identified as one of the main reasons why many organizations are still lagging behind with regards to the implementation of new changes. For this reason, employee resistance to change is a vital element that needs to be given keen attention (Kaplan &Norton, 1992, p. 74). Many scholars have pointed out to the fact that conflicts in the organizations are caused by the employee resistance.

The unity of the employees is considered to be strength to the organization. But when the employees have divergent views and attitudes towards a new proposed change, the business will be highly affected. These divergent opinions and attitudes are the contributing factors to employee resistance. The resistant employees are perceived to be radicals who believed that the goals and the views of the company clashed with their own individual goals and needs. Resistance is an impediment to change, and for change to occur, the company needs to eliminate resistance (Coch & French, 1948, p. 512).

Some employees can reason that the perceived change will result in job losses, others may have the belief that the perceived change can result to decreased salaries or allowances, while others might argue that their skills and talent will become obsolete and no longer needed by the company. Therefore, this implies that the bigger problem to solve in this case is not the resistance to change, but rather to look at the bigger picture of the outcomes of the change.This paper will explore the role of a solid communication strategy in change management, and will be based on a case study of Delta Airline (Coch & French, 1948, p. 512). The paper will apply different theories and concepts and key arguments between authors and different theoretical positions.

Delta Airline

Company Overview

Delta Airline is one of the leading American Airlines based in Atlanta, Georgia. It is also a widely recognized and celebrated brand name in the air transport industry for over 80 years. This is attributable to its route network that covers over 334 cities in more than 64 countries and up to date air transport system. In addition, Delta Airline is a member of the Sky Team Alliance which has increased its global presence to roughly 140 countries (Delta Airline, Inc., 2015, p. 1).

The market environment of Delta Airline is highly competitive with global, regional and local competitors. Just like the tech companies, the greatest threat facing Airline Companies, including Delta Airline is rapid technological change and global economic conditions. For this reason, Airline Companies are always under pressure to come up with new products that match the existing demand. Those that cannot keep up are forced out of the business (Delta Airline, Inc., 2015, p. 3). As a result, change management is significant for Delta Airline sustainability.

Planned changes

The Delta Airline is proposing a positive change program, which is bound to be received with hostility from senior managers and other employees. The proposed changes will create a paradigm shift in regards to the relationship between the owners of the company and the employees. The changes are necessary as they are to determine the survival of the airline company. The owners have come up with a plan that will ensure the introduction of new changes and their successful implementation. The plan is to be executed within a period of six months. It involves creating awareness with regards to the urgency of the situation. Besides, training and facilitations will be done in order to prepare employees. The proposed changes involve setting of new targets and operational activities and, therefore, are highly concentrated in some areas.

Probable Causes of Resistance

The three causes of resistance include; first, the goals of the organizations are unlikely to match with the goals and needs of the employees; second, the proposed changes will require some form of behavioral changes on part of the employees; third, the employees will feel that they do not have adequate knowledge and skills to tackle the new challenges.

The new targets are high and the newly set goals are not in conformity with the personal goals of the employees. This will bring about a slowdown in operations as the employees will slowly start to resist the proposed changes. The new policies and procedures of working will also demand the behavioral changes from the employees. As a result, Delta Airline will start registering high rates of absenteeism and high rates of the employee turnover.

In addition, the employees will be less motivated, which will compromise the quality and quantity of the output. For this reason, the airline will experience increased costs of operation as resources will be wasted and productivity lowered. Last but not least, the employees will feel they did not have adequate skills and knowledge to tackle the new challenges since six months is too short to master the new concepts. They will believe the new changes are meant to frustrate them, whereas the management will feel the employees are sabotaging operations. All these will bring discomfort at the workplace.

The relationship between change resistance and communication

Any form of change in the organization requires constant communication between the owners and the employees. The employees need to know about the proposed change in advance and they should be given time to fully understand the nature of the change and the likely benefits that the change will have on their role as employees holding various positions. Change is inevitable, and at some point in any organization, it has to occur.

Communication, therefore, is seen as an act of preventing a likely fall out in the structure of the airline (Clampitt & Berk, n.d., p. 9; Coch & French, 1948, p. 514). The structural change in the company should not take the employees by surprise, but rather the employees should anticipate it in advance. Communication involves sharing of information and presentation of facts. The owners who are the proponents of change should have an in-depth preparation in advance in regards to the benefits of the proposed change. In this case, the benefits should outweigh the demerits (Guth & Ian, 1986, p. 320).

Communication strategies necessary to minimize change resistance

Without a doubt, communication plays a very significant role in business management, specifically change management. According to the iceberg theory, there are four communication strategies that can be used to minimize employees dissent to new changes based on different stages of planning. The strategies include use of multiple channels of communication, linking messages to the employees pre-existing perception, safety valve strategy, and proper timing (Clampitt & Berk, n.d., p. 9). However, the study will only focus on three strategies.

The use of multiple communication channels enhances the probability of the message reaching the target audience, which are the employees. As we have already seen, structural change in the company should not take the employees by surprise, but rather the employees should anticipate it in advance. In addition the use of multiple channels, for instance, electronic mail, face-to-face meetings, and internal memos can help the management to determine whether the employees are still in denial (Clampitt & Berk, n.d., p. 9). On the other hand, linking messages to the employees pre-existing perception will help them relate with the proposed changes. For example, when communicating to employees about the need to change a healthcare system, it is important to remind them about the existing healthcare crisis (Clampitt & Berk, n.d., p. 10).

Lastly, the safety valve strategy is all about ways of confronting employees doubts. Any form of change in an organization is likely to experience resistance from employees. As a result, the management needs to harvest the dissent, which entails taking into consideration workers concerns about the proposed changes and organizing a meeting to deliberate on the same. The deliberation should involve making amendments where necessary. If this is not done, there is a high probability that the employees will sabotage new plan (Clampitt & Berk, n.d., p. 11). The safety valve strategy is the most appropriate approach to deal with the problem facing Delta Airline. This is partly due to the fact that employees are the custodian of the change process and not involving them means the process is bound to fail.

Conclusion

From the above discussion, it is very clear that employees always resist change when they are not involved in the change process. Communication have defined goal as the main objective behind the setting up of numerous strategies. All the employees and the owners of the company must work as a team with the motivation to meet the organizational goals. It is through communication that the companys identity is created.

The goal also provides motivation to the employees, thus, giving them the enthusiasm and psyche to discharge their duties in an appropriate manner. An organization can have short term goals, mid-term goals and long term goals. The top management of the organization uses the organizations goals as a cornerstone for designing the communication strategy. The communication strategies are very helpful to the company in realizing maximum revenue, providing exceptional customer service, and enhancing the quality of the products. Therefore, in order for Delta Airline to avert employee dissent, it should follow the following plan:

1. It should use multiple communications channels to avoid an element of surprise.
2. The message sent should be linked to the employees context of thinking.
3. The company must take into consideration the employees concern and deliberate on the same.
4. The deliberations should be used to amend the proposed plan accordingly to minimize dissent.

References

Clampitt, P., & Berk, L. (n.d.) Strategically Communicating Organizational Change. Kansas, IL: University of Campus.

Coch, L., & French, J. (1948). Overcoming resistance to change. Human Relations, 1 (4), 512-32.

Delt Airline, Inc. (2015). Delta Airline: Our History. Web.

Guth, W., & Ian, M. (1986). Strategy implementation versus middle manager self-interest. Strategic Management Journal, 7 (4), 31327.

Kaplan, R., &Norton, D. (1992). The Balanced Scorecard: measures that drive performance. Harvard Business Review, 71-9.

Reichers, A., Wanous, J., & Austin, T. (1997).Understanding and managing cynicism about organizational change. Academy of Management Review,11(1), 4859.

Weick, K., & Quinn, E. (1999). Organisational change and development. Annual Review of Psychology, 50, 36186.

Virgin Atlantic Airways was established after an American entrepreneur proposed the idea of an intercontinental airline that would only aim at the business class flights. Richard Branson vetoed this exact approach but loved the idea. To begin with, he reduced the risk by renting the whole thing, and he was capable of competing with the greater air companies by offering an allegedly better service at striking prices (Bolton & Thompson 2013).

Virgin Atlantic Strengths

The first and the foremost strength of Virgin Atlantic Airways is that it is headquartered in a country where air company rivalry is abided and boosted because of the elimination of administrative control in the aircraft travel business, which was ratified to generate more rivalry within the industry. Today, the two countries that dominate the airline market worldwide are the United Kingdom and the United States. This fact can be confirmed with the number of air company brands they have. Rates of the commercial airlines are quite adaptable to the clients budget. As a consequence of this strategy, Virgin Atlantic has been capable of presenting the best service suite to its clients worldwide at a low price.

Another strength of Virgin Atlantic is that even supposing they are not taking part in any major airline unions, the corporation has become associates with some well-known carriers (for instance, Singapore Airlines and Continental Airlines). Virgin Atlantic can benefit meticulously from these alliances. These benefits may include a larger market admittance, the attainment of different means of supply, the instant access to various new knowhows, and the overall upgrade of the companys performance (Bolton & Thompson 2013).

The government of the United Kingdom sees the airline industry among the most important and is familiar with its influence on the economy. Due to this, the currently cushioned state of the UK airline business can be well thought-out as a strong point of Virgin Atlantic, too. It indicates that the market is being continuously supported, where all the enhancements and modifications for the business are seen as a provision basis. Virgin Atlantic is considered to be one of the frontrunners when it comes to the novelties in the airline amenities and customer service (Bolton & Thompson 2013).

Consequently, the utmost strength of Virgin Atlantic lies beneath its enthusiastic accent on client service and origination. As an example, it presented to their customers the first seatback entertaining system in planes. Another illustration of ingenuity displayed by the company was the evasion of being a solemn commercial corporation, but as an alternative is a business that provides a lot of entertainment, has a youthful attitude, and an overt sympathy for modern values.

Another aspect that can also be measured as one of the strengths of Virgin Atlantic Airways is technology (Carter 2013). Virgin Atlantic is industrially innovative as innumerable technology announcements of the corporation are made across the Internet. For example, as a replacement for the dial-up server for its IT organization, the corporation upgraded it and spent money on a remote server. These types of upgrades cut expenses significantly and make the business work faster, which is a direct advantage for both the management and the customers, who are expecting flawless service from Virgin Atlantic.

Virgin Atlantic Weaknesses

The weakness of Virgin Atlantic Airways is that it is not currently a part of a major international union. Even though it presently has numerous recognized allies, the range of the corporation in terms of major extension is still partial. The benefits that Virgin Atlantic Airways lack because of the limited flight-sharing are the lack of bigger net entrée, continuous travel, and improved benefits for those customers who are the members of the frequent-flier program.

One more weakness of the firm is that it lacks clarity. Virgin Atlantic does not expose yearly reports, which may be a shortcoming specifically to the clients who want to learn more about the company. The corporation favors casual methods, which may not be favored by the adult clientele who desire their air company to be as professional and as respected as possible.

The productivity of Virgin Atlantic Airways is at a low level. While the consequences demonstrate that the company is on the correct path, it has suffered losses throughout four out of the prior five years. Even in gainful periods, its operational boundaries have classically been only about 1% of incomes or less (Bolton & Thompson 2013).

Virgin Atlantics sub-brand, Little Red does not show a really good performance and brings profit. Instead, it shows the VAs obsession with the London market and the fact that Virgin Atlantic is bound to only several major destinations unlike their rivals (Carter 2013).

Virgin Atlantics profit and loss account are under-exploited. It is proved by a hasty rate of money spending, granting this should alleviate if the corporation can accomplish its goal to come back to profit in 2017. VAs private proprietorship assembly may also comfort its admittance to the reserves when required (its financial statement usually takes in about a hundred million pounds in mortgages billed to assembly businesses).

The Organisations Performance

Leadership

Some accept it as true that business is an unethical institution and that old-style concepts of integrity do not fit in the business setting. Others, like Virgin Atlantic originator Richard Branson, are certain of the fact that if you are not in commerce to do decent things, you ought not to be in business in the least (Branson 2014). An examination of leadership stylishness in the corporation, conversely, has exposed that renovating leadership is prevalent in Virgin Atlantic. It works similarly with other establishments belonging to the Virgin Group, too. Furthermore, the administrative principles of Virgin Atlantic have been named inventive, enjoyable, and non-conventional (Branson 2014).

A transformation in a leadership style in the interior of the Virgin Group will have a momentous influence on the general organisational values, along with the level of worker incentives. Consequently, the management has to observe numerous components of organisational activities such as employee enthusiasm, management style, and organisational values. These three might be considered the body parts of an organism and the management has to be aware of this detail when targeting to announce changes on any separate component (Carter 2013).

Corporate Culture

Culture can be explicated as common, informally learned data and forms of conduct. So, corporate culture relates to common principles and behavioral patterns that are linked to a definite company. Virgin Atlantic has a truly amazing ethnic dimension with originator Richard Branson reassuring the workers from all departments to provide honest feedback. In terms of escaping the ambiguity of the cultural dimension, alternatively, Virgin Atlantic structural philosophy can be labeled as proficient by the reason of the firms efforts of implementing a pioneering tactic in coping with countless propensities in the business.

It can be stated that in the example of Virgin Atlantic the corporate culture of the business is to nurture a gainful air company where customers love to fly and where employees love to do their job. Nevertheless, commonly, the corporate culture in Virgin Atlantic can be defined as pleasurable and unorthodox as it has been established and extensively endorsed by its founder Richard Branson. It has been acknowledged that Virgin Atlantic organisation exercises a broad specter of perceptible and imperceptible motivational gears to grow the levels of worker fulfillment and enthusiasm.

Corporate Governance

Virgin Atlantic is a mass customer brand. The strength of a brand with principles is in the way of how the customers distinguish the brand and the companys skill to build trustworthiness and predictability (Singh 2014). More willingly than taking a top-down governance tactic on the way to establishing corporate accountability and maintainable growth, the management at Virgin Atlantic chooses to elucidate, lead, and inspire. In this manner, the company will guarantee the employees recognize that accepting sustainability as an essential value means working on pertinent issues which will eventually be advantageous for their result.

Virgin Atlantic changes the attitude that maintaining a business in an accountable and justifiable way means forfeiting progress and revenues. Virgin Atlantic helps all of its employees to concentrate on the good sides of commercial obligations and supportable growth of the business. A competitive benefit, guaranteeing supply, and rate effectiveness, along with risk management, may be considered a proper example. Virgin Atlantic keeps on paying attention to its employees to make certain new risks are recognized and resolutions found and distributed as fast as possible. Virgin Atlantic puts its faith in knowledge and the spreading of its methods of top practice. They are continuously learning, and they will let the customers of their progress as they move forward.

Conclusion

The paper dwells on the quick history of Virgin Atlantic and how it has been established. The key strengths and weaknesses of the company are reviewed and explained. The views of Virgin Atlantic (and Richard Bransons in particular) on the leadership, corporate culture, and corporate governance are also thoroughly studied and explicated. The paper states the significance of the company for the UK economy and provides an analysis of the current status of Virgin Atlantic on the background of the current situation in the world.

References

Bolton, B & Thompson, J 2013, Entrepreneurs: Talent, Temperament and Opportunity, London: Routledge.

Branson, R 2014, The Virgin Way: Everything I Know About Leadership, Westminster: Penguin Publishing Group.

Carter, J 2013, Marketing Plan Example: Virgin Atlantic Little Red, Munich: Grin Verlag Ohg.

Singh, S 2014, Corporate Governance: Global Concepts and Practices, New Delhi: Excel Books.

Introduction

The organizational culture plays an integral part of any successful company as it is an important strategic factor mobilizing all the structural units of the company and each employee individually to achieve the established goals within the framework of the declared mission of the company. The organizational culture determines employees satisfaction and the overall strategy of the company. In this connection, the paper aims at the comparison of Southwest Airlines and United Airlines organizational cultures including strategy, leadership management, structure, and impact on employees.

Size

Southwest Airlines is an international company that was initiated in 1971. It is one of the largest pioneer low-cost airlines in the US and in the world by a number of passengers. The companys fleet consists of 684 Boeing 737 aircraft of various modifications, which make more than 3,400 flights a day (Southwest Airlines, n.d.). In its turn, merging with Continental Airlines in 2010, United Airlines became one of the largest airlines worldwide. Nowadays the companys fleet includes approximately 700 aircraft (United Airlines, n.d.).

Strategic Focus

United Airlines seeks to follow the modernization of the world and operates according to the rapidly changing digital environment. For example, it provided all United pilots with 11,000 iPads (Warren, 2011). Moreover, the company moves to paperless performance so that employees might receive the required information as soon as possible. Such a strategy leads to the employees convenience and cost minimization as well. Southwest Airlines applies a point-to-point model as compared to the hub and spoke model of legacy carriers such as United Airlines (Schmidt, 2015).

Consequently, the company offers customers lower flights and lower average flight time. Seeing the above strategy, Southwest Airlines arranges seats closer and reduces costs. Besides, the airline uses the fuel-efficient fleet of airplanes that contributes both to the innovativeness and the maintenance costs decrease.

Structural Design

Both companies apply specialization when the same employee performs the same task. Likewise, they use functional departmentalization that is the division of the organization into separate units, each of which has its own clearly defined roles and responsibilities. The specific activity of each department corresponds to the most significant areas of the company. In this case, the basic functional units of airlines are operating departments, implementation, and finance.

Speaking of the chain of command, one might note it both in Southwest Airlines and in United Airlines. More precisely, the hierarchy of the chain of command goes down from the board of directors to supervisors and then to employees, who perform the particular task.

The span of control of the mentioned airlines involves the particular area of operation, the number of employees, and the volume of the aircraft. In order to manage the span of control, Southwest Airlines supports the concept of decentralization (Ferrell, Fraedrich, & Ferrell, 2013). Similarly, United Airlines considers that the centralization would increase the customers costs and flight times. It seems important to note the formalization and optimization of the interaction between companies departments as these processes allow addressing emerging challenges better and faster.

Organizational Culture

United Airlines HR management is at the highest level. The company values its employees and provides them with everything concerning what they are interested in, namely such artifacts as feeding them lunch, arranging closets with juice, and others. Consequently, everyone becomes a part of a huge mechanism, where each in his place and doing his job. The awareness that you are part of something important gives new incentives and suggests plenty of opportunities. Ultimately, the success of United Airlines depends on the concerted actions of all team members, each of which has specific responsibilities. Such a commonality blurs the lines of communication within the company. As a result, employees could express their views without fear of being improperly treated.

At the same time, Solomon (2012) emphasizes Southwest Airlines relentless focus on culture, which none of its pop-up competitors was willing to slow down to emulate (par. 2). It shows that the company evaluates employees as an indispensable part of the success. In spite of the current technological revolution and changing business realities, the staff takes the paramount value and, therefore, it is provided with all the necessary artifacts to meet employees requirements.

In this regard, the company introduces the following unique values: a warrior spirit, a servants heart, and a fun-loving attitude. The fun-luving attitude implies that the company wants people who are proud to be here, people who have fun and luving attitude and dont take themselves too seriously (Makovsky, 2013, par. 5). The warrior spirit assumes being fearless to deliver the service while the servants heart means respect and responsiveness

Role of the Leader in Shaping Culture

According to Scandura (2016), leadership is about inspiring others to follow their vision for the organization (p. 42). Supporting the above statement, United Airlines implements the strategy of diversity and inclusion. Oscar Munoz, a President and Chief Executive Officer of the company, claims that the following criteria constitute the corporate culture of the airline and are ensured by the leader:

• Dedication;
• Focus on employees satisfaction;
• Resourcefulness;
• Effective communication between management and employees;
• Freedom of action and toughness at the same time;
• Equal opportunities (United Airlines, n.d.).

After all, the leader aims to create an appropriate working environment that would promote achieving high results along with staff satisfaction. What is more, the companys leadership provides training that allows the staff to remain competitive and experienced. United Airlines ensures support and rewards to motivate employees to work harder. The leadership management designs examination tables for each department that allow taking into account the specifics of the personnel and the possibility of promotion. As a rule, the promotion is realized for such executive positions as executives apparatus of affiliated joint-stock companies; leading experts; specialists with appropriate education and positively proven in previous performance; and young professionals, who have successfully completed training.

The aim of Southwest Airlines is to provide employees with attractive opportunities for professional development, competitive remuneration, and social protection. The right recruits, flexible policies, rewards and pricing, and aspiration to improve constitute the leadership role in shaping the culture (Southwest Airlines, n.d.). The airline also tends to optimize its business processes and corporate structure and develops the innovative activity and professional excellence of the staff. The latter is procured by adequate and timely employees training.

It is essential to point out that during the selection of candidates for specific positions, United Airlines pays attention not only to the general requirements but also to the professional and personal peculiarities of the applicant. The following methods are used to control and train the staff:

• Analysis of the documentary evidence such as records, autobiographies, performance, certification, and other documents;
• Interview to identify information of interest (desires, needs, motives, etc.);
• Monitoring employees behaviors in different working situations.

Impact: Employee Turnover and Satisfaction

Considering the above analysis of Southwest Airlines and United Airlines organizational structures, it becomes obvious that both companies make efforts to meet their employees expectations. Therefore, the majority of employees like working for mentioned airlines. They appreciate the friendly and responsive atmosphere and teamwork. Besides, the staff is quite satisfied with rewards and training.

To sum up, the comparative analysis of two successful airlines showed that they have good organizational culture including effective communication, corporate identity, and elaborated human resources management system. It allows companies to execute the primary function of integration that connects employees and provides them with a sense of belonging to the organization and pride for it.

Impact: Organizational Performance

Southwest Airlines follows the well-organized culture, the corporate philosophy presents a kind of ideological platform, which is based on all of its activities in the field of corporate culture comprised of its mission, values, and basic principles of operation. The leadership of the company understands that passengers are the key contributors. Therefore, the main duty of all employees is to assist them. To do this, the corporate culture of the company is incorporated in the concept of development of such staff qualities as competence, teamwork, equal opportunities, understanding of the importance of relationships with passengers, a focus on customers satisfaction, and continuous improvement of service quality.

References

Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2013). Business ethics: Ethical decision making & cases (9th ed.). Mason, OH: Cengage Learning.

Makovsky, K. (2013). Behind The Southwest Airlines Culture. Forbes. Web.

Scandura, T. A. (2016). Essentials of organizational behavior: An evidence-based approach. New York, NY: SAGE Publication.

Schmidt, A. (2015). Southwests Low Cost Strategy Helps Maintain a Competitive Edge. Market Realist. Web.

Solomon, M. (2012). What you can learn from Southwest Airlines culture. The Washington Post. Web.

Southwest Airlines. (n.d.). Southwest Airlines. Web.

United Airlines. (n.d.). United Airlines. Web.

Warren, C. (2011). United Continental replacing pilot manuals with iPads. CNN. Web.

Air transportation has become one of the most dynamically developing branches. The popularity of traveling by plane leads to the high competitiveness of the companies providing the air carriage service. An airline should have a reputation of the reliable air carrier and the indisputable authority to be competitive.

American Airlines is one of the most influential and well-known major US air carriers. Though its history is full of both ups and downs, the company managed to establish a reputation of one of the best airlines by employing effective techniques aimed at reducing costs and constantly investing in the successful development of its unique high-quality services.

The history of the companys success

The history of the company dates back to 1926 when the name American Airways was used as a collective name of different air carriers. Several years later, the company was organized as a united structure. In 1934, E.L. Cord bought the company and renamed it to American Air Lines.

In 1936, the company started using DC-3 airplanes and creating its brand based on marine terminology. In one year, the number of passengers carried by American Airlines reached one million. The quick economic growth of the business let it support the building of LaGuardia Airport and become an owner of the lounge, later known as Admirals Club. As the company grew, DC-4, DC-6A and DC-7 freighters were put into service (History of American Airlines, 2015, par. 7).

During the Second World War, half of the fleet was used for the military purposes. After the end of the war, the company put much effort in improving its services. It introduced such innovations as Family Fare Plan, the Magnetronic Reservisor to check the availability of seats, coast-to-coast jet service, the Lockheed Electra, etc. In 1959, the companys cooperation with IBM resulted in the creation of Semi-Automated Business Research Environment (History of American Airlines, 2015, par. 15).

In 1977, American Airlines introduced the Super Saver, which became the most popular fare in the history of the company (History of American Airlines, 2015, par. 19). Until the end of the seventieth, the company managed to achieve a significant economic capacity and develop a well-organized structure of services. American Airlines developed a strong competitive ability in the market of air carriage and became the most modernized airline in the USA.

The process of Airline Deregulation in 1978 resulted in the growth of competitiveness on the market. The company had to use new marketing techniques to stimulate the interest of the patrons. The loyalty fare program was extended, but other airlines introduced similar programs. American Airlines had to offer a number of new advantages in the program and signed contracts with hotels and car rent services.

Later, «AAdvantage» became the first program offering cooperation with foreign airlines. After the deregulation, the company started opening hubs and buying new international routes. It bought central- and south-American routes from Eastern Air Lines and a part of TWAs routes in Heathrow. After the scandals connected with the merger with TWA and the events of September 11, the company started losing its economic strength and popularity.

In 2003, the company was on the verge of becoming a bankrupt. However, Edward Brenan managed to lead American Airlines out of the crisis. During the next decade, the company introduced various innovations and established good cooperation with numerous foreign airlines.

However, in 2011 AMR Corporation became bankrupt. In the search for a solution, the corporation decided to merge with US Airways Group. Though numerous attempts to block the merger were taken, it was officially recognized in 2015. The company experienced both economic and competitive success followed by bankruptcy and loss of gained reputation during the post-deregulation period. While searching for effective solutions, the company had to implement new ideas to change its structure.

Route structure and product alternatives

American Airlines flies to cities on four continents. Companys network is specially developed in the United States, where it serves more routes than any other air carrier is. At the beginning of the 21st century, the company started broadening its presence in Asian countries. During the next ten years, it launched flights to Osaka, Deli, and Peking.

In 2008, the first direct flight from Moscow (Domodedovo) to Chicago (OHara) was launched. Later, the company started providing flights from Miami to Brazilian cities Belo Horizonte, Recife, and Salvador.

In 1999, American Airlines became one of the founders of Oneworld alliance. The membership in the alliance lets the company offer the network of routes covering the whole world and a range of services impossible to be presented by one separate airline. It makes air carriages more convenient and advantageous for passengers. At the present time, the global network of the Alliance covers nearly 1000 destinations in more than 150 countries of the world.

American Airlines offers a wide range of products and services. They include Allianz Global Assistance travel insurance for U.S. residents, the Business Extra program, group fares and amenities for 10 or more people, Low Price Guarantee program, etc.

The company offers American Airlines credit cards, which give numerous bonuses and help to reduce the costs of purchases, and travel gift cards. Passengers traveling in first or business class can use Five Star Service. It includes departure, connection, and arrival assistance. Besides, access to the Admirals Club lounge is provided.

The company offers world-class products, including an extensive global network, the most advanced aircraft fleets in the world, products for cargo customers, AAdvantage Loyalty Program. Besides, American Airlines introduced exceptional in-flight offerings, such as in-flight wi-fi, entertainment on demand, industry-leading premium cabin entertainment, and new and refreshed in-flight amenities. Each of these products provides numerous benefits for people eager to enjoy exceptional flight experience for acceptable prices.

The company continues to focus on developing products that are adaptable to meet the specific needs and individual preferences of customers (Customers. World class products, n.d., par. 14). Highly personalized offers include Your Choice SM (personalized flight options), DealFinder SM (automated fare-search application), Mobile Apps, etc.

These products main benefits are various bonuses providing maximum convenience in adjusting the flight options to the needs of the passenger. The company tends to reduce costs for such programs in order to attract more clients. Patrons are provided with a wider range of possibilities to use the beneficial offerings.

The company achieves product differentiation by promoting its unique brand design and new functional features of the products. It is constantly launching modern, up-to-date services and products aimed at creating the unique flight experience for its passengers. Besides, American Airlines invests much money in proper advertising. Constant improvement of existing well-accepted products and creation of new products with unique qualities create a competitive advantage for the company.

Airline departments

Different American Airlines departments play an essential role in planning, development and execution of flight operations. Line personnel consist of the departments that include employees involved in providing airlines services. In American Airlines, the line personnel department is formed by such sub-departments as Engineering, Flight Attendant, Marketing/Planning/Sales, Operations/Maintenance/Mechanics, Pilot, Cargo, Customer Service, etc.

These departments are the heart of the airline. Each of them is responsible for providing appropriate support for different operations related to flights operations. Engineering department works on creating and modernizing safe and convenient jets for the successful execution of flight operations.

Flight Attendant and Pilot departments are responsible for providing the services during the flight. Marketing/Planning/Sales department works on the development of the effective sales system that satisfies all the needs of passengers. Operations/Maintenance/Mechanics department works on efficient examination of airplanes and providing maximum safety during execution of flight operations. Customer Service departments work is aimed at planning efficient service and quick response to the clients needs.

Besides the above-mentioned main departments that provide the most important support for efficacious flight execution, there are also the departments that work on providing additional services. Information Technology departments develop the management software and mobile device applications to find effective solutions for everyday operations issues. Human Resources department provides hiring and managing personnel and ensuring the professionalism of all the employees involved in planning, development, and execution of flight operations.

All departments contribute to successful functioning of the company and ensure the proper quality of the services provided by it.

Airline cost structure and methods to obtain competitive cost advantages

Cost structure can be defined as a ratio of fixed costs to variable costs. It consists of the activities of the fixed and variable costs that a company must be prepared to pay when providing a service.

The cost structure of American Airlines can be analyzed in relation to a cost object and divided into product cost structure, service cost structure, and customer cost structure. The companys product cost structure consists of fixed and variable costs. Fixed costs refer to direct labor and manufacturing overhead involved in producing flying jets and maintaining them in good condition.

Variable costs refer to material and production supplies, commissions related to engineering, repairing flight jets, and providing the maximum quality of characteristics essential for the safety of engines. The companys service cost structure also consists of fixed and variable costs.

Fixed costs refer to administrative overhead while variable costs are related to staff wages, bonus programs, entertainment and health programs. The companys customer cost structure reflects the costs spent for maintaining appropriate customer service. Fixed costs include the administrative overhead for customer service. Variable costs include money paid for products and services, which are sold to customers, product returns, credits, and discounts, etc.

Controllable costs are the costs over which manager has direct and complete decision authority (Lal, 2009, p. 41). Controllable costs in American Airlines cost structure are those costs that can be controlled or reduced by a manager at the certain organizational level.

The companys controllable costs include tools, the power used while manufacturing and repairing airplanes, and costs for unique services provided by the company. In fact, all costs can be regarded as controllable by certain managers in the company, and the responsibility of controlling costs is delegated to different departments (Lal, 2009, p. 41).

Competitive advantage can be defined as a position the company occupies against it competitors (Goel, 2009, p. 251). American Airlines employs cost leadership method to obtain sustainable competitive cost advantages over other carriers. The company is well known for the combination of low prices and high-quality services. As the company occupies a leading position among US air carriers in providing air carriages in the country, it has an opportunity to offer the prices that appear to be attractive to customers.

The company strives to attain the same cost compatibility in international flights, but recent problems connected with bankruptcy and the crisis inside the company forced it to eliminate many unprofitable routes. However, the merge with US Airways Group allows American Airlines to gain the competitive cost advantages it has lost during the recent decade.

Besides, the company employs differentiation advantage method, as it continuously invests in developing the unique modern services for customers. The wide range of different loyalty programs for passengers helps American Airlines to deliver greater services for the same price of its competitors.

The methods of Revenue Management used by American Airlines

Revenue Management deals with differential pricing and other techniques aimed at increasing customers demand for a companys services (Huefner, 2011, p. 1). The emergence of Revenue Management began in the airline industry strictly as differential pricing (Huefner, 2011, p. 1).

American Airlines is known for introducing Revenue Management (later known as yield management) in 1985. After the Airline Deregulation Act in 1978, the first major low-fare airlines were created, presenting a threat to the established airlines (Huefner, 2011, p. 9). American Airlines quickly reacted to the changes in the market by implementing new techniques. The company launched a new pricing scheme with American Super-Saver fares (Jerenz & Tushaus, 2008, p. 8).

In such a way, the company revised the program based on variable demand for different flights on different day, requiring a different allocation of discount fares (Jerenz & Tushaus, 2008, p. 8). The SABRE system helped to explore the real rates of booking in different fare groups.

They were analyzed in comparison with the predicted rate. Then the inventory of variously priced seats was adjusted based on the gained results. Later, this strategy was named yield management. In seven years, the company launched its Ultimate Super-Saver fares program. The strategy used by American Airlines appeared to be successful, as low-fare airlines went bankrupt soon. The company continues to use differential pricing method successfully, even though it has experienced tough times recently.

Nowadays Revenue Management is used by different industries. Though its development was connected with air carriage, later it was employed by travel and tourism industries. The example of American Airlines success gave popularity to the techniques of Revenue Management. The methods of Revenue Management have developed a wide range of techniques and are now used by various organizations. It refers to car rentals, cruising service, railways services, internet providers, etc. (Jerenz & Tushaus, 2008, p. 9).

The analysis of techniques used by American Airlines to gain the reputation of one of the most respected air carriers helps to understand the key to its success. Though the company has experienced some difficulties recently, its overall strategy appeared to be efficacious and resulted in the companys formation as one of the leaders in the airline industry.

References

Customers. World class products. (n.d.)

Goel, S. (2009). Crisis management: Master the skills to prevent disasters. Singapore: Global India Publications.

History of American Airlines. (2015).

Huefner, R. (2011). Revenue management: A path to increased profits. New York: Business Expert Press.

Jerenz, A., & Tushaus, U. (2008). Revenue management and survival analysis in the automobile industry. New York, Philadelphia: Springer Science & Business Media.

Lal, J. (2009). Cost accounting (4th ed.). Noida, India: Tata McGraw-Hill Education.