Chaos in the Skies ? The airline industry pre- and post-9/11

Résumé du document

The 9/11 attacks were a series of co-ordinated terrorist attacks upon the United States of America (USA) carried out on Tuesday, September 11, 2001. The global economy and the airline industry felt the shock, and is still trying to recoup. This essay will discuss the impact of the 9/11 attacks upon the American and international airline industries, particularly assessing the potential schemes for a future strategy. It will first look at the attractiveness of the US airline industry before and after the 9/11 attacks. A SWOT analysis will be then conducted as a basis for recommending future strategic options for an individual FSC company. It will finally consider the plausible outcomes for a future strategy, given that a similar event is probable.

Extraits

[...] The first stage is the definition of resources and competences. Resources are divided both in tangible or intangible features, and in threshold or unique assets. They refer to what the company has and can do in order to compete in a market. Competences then indicate the activities and processes through which an organisation deploys its resources effectively. When understanding strategic capabilities, the key point is how resources and competences are used for achieving a long term benefits Cost efficiency is an important strategic capability that BA needs to achieve as the environment is difficult. [...]

[...] It will first look at the attractiveness of the US airline industry before and after the 9/11 attacks. A SWOT analysis will be then conducted as a basis for recommending future strategic options for an individual FSC company. It will finally consider the plausible outcomes for a future strategy, given that a similar event is probable Attractiveness of the US airline industry Initially the market can be distinguished in terms of the carrier type and secondly according to the market's type, either it implies long-haul or short-haul. [...]

[...] As such, it expects to reinforce its core competence by customer retention and catching new customers. BA's weaknesses mostly come from the cost factor. Fuel costs really are a burden, as Martin George, BA's commercial director stated (2005). Total costs increased by in 2005-2006, as fuel bills rose up Fuel factor is a weakness for any airline companies because, not only does it impact on their bottom line, but companies also depend on it in order to perform. There is no alternative to fuel. [...]

[...] To conclude, the US airline industry before 9/11 attacks was already encountering problems. US airlines were expecting a loss of US$3 billion in 2001 (Rhoades et al., 2004) mainly due to the economic bubble burst. “September 11 was the coup de grace.” (Levine et al., 2002) After 9/11 attacks In the days following the attacks, demand fell dramatically, with a 74% drop in US bookings and 19% in the rest of the world, and an overall 30% reduction in passengers' number. [...]

[...] Companies definitely will have to adapt to the present situation then, going through a logical incrementalist process and constantly scan as much the environment as the company's expansion. They will have to think the strategies. BA has successfully dealt with 9/11 by cutting costs and offering better prices to the public. Its emergent strategy thought at the time, called Future Size and Shape, is still in progress. When thinking about how a company can progress, there are three different ways at the issues of development which are included in the strategy lenses. The design lens strategy would not be suitable because it is too rational and structured. [...]