Airline Analysis
Statement of Problem: SlugAir, a small regional airline, aspires to become a
much larger airline. They pride themselves on being an efficient, single-class,
on-time and reliable airline. This airline appeals to those who want reliable,
get me where I wanna go service whether the passengers be the everyday traveler
or a cost-conscious business traveler. Currently, SlugAir serves small locations
throughout California and the Western US. SlugAir serves these locations by
feeding hubs for the national carriers and servicing routes that avoid the major
hubs. This strategy has allowed SlugAir to become a very profitable small no
frills airline. Most airlines are organized in what is called hubs and spokes.
The hubs are two major cities that all of the airline's flights fly out of to
smaller cities called the spokes. In between the hubs is what is considered the
airlines main route as the flights in between the hubs are the companies most
profitable. Flights to the spokes make the airline extra money and people on
these flights usually have a lay over at the hub and then go onto the smaller
city or may even switch planes to get to their final destination. Thus, the
airline feeds its own route by flying to their hubs ( main money making cities)
on the way to also getting those that want to get to smaller cities to their
destinations. In order for SlugAir to become bigger and more profitable it must
open a route between two major cities in the west. For efficiency, these cities
need to be ones that it currently services in order to allow them to feed their
own route. The competitors that we are considering are 1) United 2) Alaska 3)
Delta and 4) Southwest.
In order to find the best possible route to open we will
evaluate each of these airlines and the routes in which we want to compete. We
will look at each airline in terms of their size, power and efficiency in the
routes we are considering. We will look at the flights offered, their times and
frequency. We will also look at the possibility of SlugAir competing with each
of the competitors and how each might react should SlugAir enter their market.
Lastly, we will evaluate ways to improve SlugAir as an airline. We will look at
ways to make the company more appealing, more widely known and more successful.
United Airlines Corporation (UAL Corp.) United Airlines is the largest domestic
air carrier in the world. With hubs in Chicago, Los Angeles, Denver, San
Francisco, and Washington D.C., and key international gateways in Tokyo, London,
Frankfurt, Miami and Toronto. United flies to 134 destinations in 27 countries,
with a fleet of 577 aircrafts. United's 101,000-plus employees worldwide bring
people together safely, conveniently and efficiently almost 2,300 times a day.
United's mission statement is: To be recognized worldwide as the airline of
choice. In 1994, United launched Shuttle By United, which competes successfully
against the new wave of low-cost, no-frills carriers. In 1997, United formed The
Star Alliance global partnership with four International carriers to provide
customers with access to more than 815 destinations around the world. In May
1997, United discontinued its Friendly skies slogan introduced in 1965, and
launched a new ad campaign called Rising, which focuses on the company's new
Customer Satisfaction Philosophy (CSP), which will become the basis for all
their actions in the future. There is only one direct route to and from Seattle
to San Francisco, which is provided by Shuttle By United and not by United
Airlines itself. Shuttle By United provides approximately 10 daily flights from
Seattle to San Francisco for as low as 166.50 USD (based on round trip); and 10
daily flights from San Francisco to Seattle for as low as 133.00 USD (based on
round-trip and 7-day advance-purchase).
