The US Airways - Research Paper Example

The US Airways Table of Contents Barros, Carlos and Couto, Eduardo. Productivity analysis of European airlines, 2000–2011. Journal of Air Transport Management, Vol. 15 (12), pg 1. 15 Scarpel, Rodrigo. Forecasting air passengers at Sao Paulo International Airport using a mixture of local experts model. Journal of Air Transport Management, Vol. 24 (12) pg 5. 16 Executive summary Having ventured into the aviation business as an “All America” airline delivering mails through the air to the Western Pennsylvania up to the Ohio Valley by use of a single engine Stinson Reliant aircraft, the US Airways has grown to become a successful airline in the US. After a series of mergers and buyouts, the US Airways grew from just a small airline operating in just a number of airports within the US to big conglomerate with a huge annual turnover (McNicholas 1). This airline has a colorful history and a rich culture facilitated by the presence of loyal customers coupled with hard working employees. However, evidence from reliable studies show that this success or rather triumph has come along with numerous setbacks. As of today, the US Airways faces serious challenges, which include the merger between itself and America West (Vasigh, Ken, and Liam 32). Analysts assent that the anticipated marriage linking the US Airways and America West brought certain obstacles, which comprise of labor challenges, integrating operations, competition, and a weak industry as well as the issue of rebranding the whole airline probably using a different color (Yunich 2). Despite being a low cost airline, the US Airways is still dealing with lost employee morale specifically after the effects of September 11 started exerting heavy toll on the aviation industry (Taneja 65). Generally, in order for the US Airways to stay firm in business, it has to introduce few changes and alter a number of its stipulations. It is therefore recommendable for the US Airways to move from excessive assets, the filing of Chapter 11 (Bankruptcy, BUS 371), and lost customers to a “load factor” (Moyer and Reynolds 51). Position of the problem Since the problems facing the US Airways are numerous, it is substantial to include a number of spectrums that establishes several positions aimed at getting a clear picture of the situation. It is agreeable that merging with the America West is crucial for the US Airways business operations (Lu 34). It can result to increased profit margins, reduced competition, and potential utilization of the company assets (Pender and Richard 50). However, a critical review of the company’s feedback from various players in the same market shows that, the merger may never happen simply because other airlines competing for the same clientele claim that this merger may diminish them by rendering their businesses useless. Profoundly, the US Airways offers a low cost service to its customers while the America West offers similar services in addition to other favorable offerings to its clients (McNicholas 2). As such, a merger between these dominant airlines would mean increased competition pro the other airlines, which would result to low profit margins, loss of customers, and subsequent exit in the industry (Brent 92). Of course, not even a single airline would want this to happen so contesting against this marriage is a priority to most of the foreseen victims. Since the major problem facing the US Airways is the issues that resulted from its subsequent merging with America West, understanding that the US Airways should not lose sight of its mission and visions statements is imperative (Vasigh, Ken, and Liam 40). With reference to the US Airways statements visions and mission, the company seeks to provide safety and value to its customers (Moyer and Reynolds 75). Additionally, it commits itself into making every flight count and dedicates its corporate social responsibility department towards maintaining a sustainable environment. Although there has been no terror effects of any plane crash within the US Airways, its merger with the America West meant that the airline had to deal with issues (Pender and Richard 77). These issues consists of the following, acquiring the Jouve AirGTI to maintain its technical content which included OEM airframe, engine manuals, standard operating procedure manuals, and engineering documentation as well as the company’s task cards (Morrell 44). This is a challenge since these cards are from a different plane manufactures such as the Embraer, Airbus, and Boeing aircrafts. Given that the US Airways has not swayed away from its goals or objectives, it appears that these challenges are posing various setbacks in its quest for achievement (Allaz 65). As demand for low cost air travel continues to grow, the US Airways finds sticking to its goals and following the advent processes set herein by the airline’s stakeholders as a major boost for its existence. Surely, the US Airways can overcome the problems posed by merging with the America West, bankruptcy, loss of customers and lost employee morale (Vroey 2). Sense The merger that occurred between the US Airways and the other low cost airline, America West, did not come as a way of a problem free airline but rather a part of challenges that come along with expansion (Barros and Couto 1). In fact, the merging resulted to a bit of hiccups that shook most of the activities that the company sought to streamline in order to realize big and significant benefits (Taneja 79). Merging created the problem of labor as employees had to undergo several channels before having their incentives and other benefits reinstated. Generally, after the merger the company had to resolve to integrate employees from both airlines into a single system or structure that facilitated work and effort towards a common company (Vasigh, Ken, and Liam 58). Labor issues cropped up at the US Airways headquarters at the time when employees from the younger America West airline felt that they would face discrimination during work placement. Worrying that awarding of employment opportunities at the new formed company would happen with regard to superiority of employees, America West employees feared that they might be forced to accept less paying jobs or lose their employment completely (Lu 46). This was so because the US Airways employees had experience and appeared to grab the senior posts leaving the lesser experienced America West staff settle for less significant positions (Allaz 80). According to observers, the US Airways stood to face stiff labor challenges within the piloting sector mainly due to the idea that the same association known as the Air Line Pilots Association represents pilots from both airlines (Pender and Richard 84). The mission and vision statement of this airline strives to achieve a conflict free working environment for all its employees (Morrell 56). Thus, such frictions between the airlines employees implies that the company is undergoing a tough time which it can calculate as a major problem especially if it concerns the company’s stakeholders (Vroey 5). Besides labor problems, integrating operations was yet another major problem facing the airline. Research findings point out that, after the merger, the airline juggled along shedding off some planes and debated over cutting off a number of employees (Taneja 88). Precisely, scores of challenges facing the US Airways indicated that the newly formed company had to cut its employees with a huge margin in order to avoid large monthly and annual expenditures (Marra 279). It is agreeable that large numbers of employees are expensive to maintain and companies may run out of business operations simply because of keeping a large pool of employees, which may be exorbitant to maintain (Vasigh, Ken, and Liam 71). Otherwise, it is rather witting to lay off some of them in order to ensure adequate service provision and reasonable earnings for the company (Plunkett 53). Merging meant increased employees, increased fleet of airplanes, and increased cost of maintenance. In the case of US Airways, Sr. Vice President and CIO Joe Beery stated that these challenges also posed other serious setbacks for the company (Vroey 6). Mainly, the major issues in this study are simply problems associated with the airline’s merger with America West whereby, the company shook every department of its operations including the fueling, passenger, and piloting sector among others (Moyer and Reynolds 88). In this view, Joe Beery explained that after merging, the company acquired a large pool of employees and a big fleet of airplanes. As a result, the cost of maintaining both the planes and employees skyrocketed leaving the airline torn between lying off some of its employees and shedding down a number of its airplanes (Plunkett 67). Currently, the company has several Airbus aircraft and Boeing not operating but maintaining them at very high cost. Review of the research observations deliberated that the amount of money that goes to the maintenance of these planes cripples the airline’s possibility of amassing substantial benefits. In addition, Joe Beery highlighted that due to the excruciating cost of fueling airplanes, the company is undergoing potential difficulties that hampers its development on a daily basis (Gebman 45). Merging signified increased amount of flights to different destinations in spite if the existing fuel challenges. Nonetheless, as the research results found, the company faces serious problems since the cost of fueling is high due to increased fuel prices (Cento 66). Note that, the entire worldwide aviation industry is experiencing the same problem of skyrocketed fuel prices therefore a large fleet of airplanes coupled with a reduced number of customers is stiff challenge for airlines. Specifically, data obtained from the company’s official website indicated that lost clientele base is affecting the US Airways’ operations in all its destinations. Reliable material information declares that it is almost impossible to achieve great productivity, efficiency, and functionality at times when a company is undergoing potential customer loss (Vasigh, Ken, and Liam 99). On one end, the industry analysts blame the decline in customer base on increased fuel prices, which in turn resulted to hiked fares (Morrell 79). Indeed, when Jouve started embracing its new position at the US Airways, content maintenance agents speculated that they would be analyzing data on how to save the airline from deteriorated customer turnover. Despite being one of the airlines that provide low cost flights within the US, the US Airways appears staggering and crippling in its pricing sector (Lu 66). Reasonably, the aviation diligence is enduring the effects of increased fuel prices. On the other end, the US Airways, in addition to all to other airlines in the world, face a similar challenge that resulted from hard economic times that hit the global business operations in late 2007 and at the wake of 2008 (Taneja 95). The between the actual vision and mission statements of this airline is wide especially when profit margin is the subject. Decreased number of customers meant many seats occupied by very few passengers while increased fuel prices signified fewer customers turn out at the airline ticket offices due to increased ticket prices (Pender and Richard 97). Subsequently, the US Airways can overcome these stiff challenges posed to its operations by effects resulting from its merger with the America West by setting up platforms that can bring strategies with achievable solutions (Marra 296). Fishbone Diagram Uncover Loss of customers, hiked fuel prices, and frictions among employees form the foremost tribulations facing the US Airways. With reference to this research, it was observable that the US Airways is suffering from a chronic deterioration of customer turn out. This is partly due to external economic hard times that resulted from the 2008 global financial crisis (Moyer and Reynolds 102). It emerged that, after the 2008 financial crisis, the United States among other gigantic economies in the world underwent a series of declining economic progress (Vroey 8). Sensibly, most business people and organizations had to reduce their travelling frequencies mainly because the economy did not allow for surplus on balance (Brent 112). The hardest industry was the aviation sector where the rate of travelling activities reduced with a big margin following hard economic times prevailing worldwide (Allaz 113). Since then, companies have been trying to gain their grip in the market but with little significance, as the subsequent recession from the 2008 financial crisis has extended its effects up to late 2011. Systemically, the US Airways lost great numbers of customers due to such hard economic times and this effect cohabitated the airline’s operation (Scarpel 5). Additionally, the issue of deteriorated economic conditions meant certain challenges linked directly to the merger between this airline and America West Company (Lu 91). For one, the merger increased the number of flights, staff, and routes making the cost of maintaining each of these affects a bit exorbitant for the US Airways. As such, the airline had to do away with some flights making it hard for the company to realize the kind of benefits it used to obtain from making those trips (Belobaba, Amedeo, and Cynthia 54). Furthermore, upon knowing that the economy was not ready to absorb the number of employees that the US Airways had, it resolved to cut off a large number of employees (Plunkett 86). Therefore, the remaining staff had to adjust in many ways, which included working more hours, working without certain benefits, and coping with reduced salaries while others had to bear with casual jobs. As seen, the root cause of these problems emanated from the effects of merging with America West airline. Surprisingly, the main reason as to why the US Airways formed a merger is that it wanted have great opportunities with substantial benefits for both the airline and everything or everyone linked to the company (Taneja 103). Nonetheless, the company witnessed serious challenges which at first appeared as simple challenges but later grew to issues that ended up costing the company huge sums of money. Currently, the economy is not ready to accommodate business operations with expensive services (Reitze 60). Moreover, the cost of operating an airline is very high yet customer availability is becoming a scarce item. Based on this, the research outcomes proved that the US Airways is facing solemn problems related to low level of income due to deteriorated availability of customers, increased fuel prices, reduced flights, a large fleet of aircrafts, and increased cost of maintenance (Moyer and Reynolds 110). Solve Reducing the number of employees was a strategic alternative of reducing the problems facing the US Airways. In fact, it helped the US Airways cope with the stringent effects of economic recession and maintain a balanced service delivery (Reitze 79). However, this research established that the US Airways can eradicate all these problems causing the company such hard times by taking various steps (Marra 301). First, the company should resolve to exercise a massive campaign aimed at accessing and acquiring more customers. It can attain this by introducing travel packages and incentives, which are unique from other airlines plying the same route (Plunkett 101). It can come up with special travel packages where their customers would enjoy special services and treatment, which they cannot get in other companies operating in the same industry (Belobaba, Amedeo, and Cynthia 70). Apart from that, the US Airways can solve its problems by seeking to establish spectrums capable of reinstating the usual setting of collective benefit realization. Through interviews, the research found out that bringing back the lost employee morale can help solve the problems facing the US Airways (Brent 124). This is achievable through reinstating the previous incentives that the company provided for its employees. Improved employee morale increases an employee’s working capacity, which in turn increases his or her output. As such, the company can realize increased profits through encouraged employee abilities (Belobaba, Amedeo, and Cynthia 95). Noteworthy, research findings made out that, employees at the US Airways fail to perform with all their abilities and knowledge due to the idea set in place by unresolved cases of job loss. In order to solve this problem and others related directly with lost morale due to lack of surety the airline can employee its staff on a permanent basis (Pender and Richard 105). Although the merger between this company and America West did bring about a bit of hiccups in the company’s operations, this does not imply that the US Airways should not form any other mergers in the future (Gebman 49). In fact, it should seek more merging opportunities but with a cautious attempt and respective formulation (Reitze 106). With cognitive mergers, the company can ensure continued growth through expandable service delivery. The difference between the best delivers in the market and poor performers in the same market lies within services offered. Although not seen as an obstacle, latest news reports that the US Airways is currently facing an acute shortage of pilots (Taneja 121). Relative measures towards offering solutions to this problem maintain that the airline needs to upgrade its scholarship services to reach a broader facet of people with the relevant qualifications but unable to study piloting due to its high costs. Build Although companies must take some actions, despite how much they affect other people’s lives in order to save those of the few, the US Airways as an opportunity to rectify any of its mistakes. Ideally, sacking some employees affected these employees’ lives both physically and psychologically (Moyer and Reynolds 119). However, the company could not do anything besides laying them off. The Cost-Benefit Analysis of this project is assumable and the US Airways can act ethically by ensuring support and determining the feasibility of the company’s capital purchase against evaluated change (Pender and Richard 117). With reference to Cost-Benefit Analysis, it is therefore recommendable that the US Airways should, Tangible Cost Employ the remaining employees on permanent basis to instill surety and confidence. Pay its employees sensible salaries. Intangible Cost Support the laid off employees psychologically in order to avoid post trauma. Tangible benefit Induce reasonable prices for its customers. Engage in corporate or rather social activities. Intangible benefit Assume the role of mentoring its staff. Introduce evenhanded service delivery to its customers and logical coalition with its stakeholders. Achieve and conclusion Potentially, the US Airways can offer solutions to the problems threatening its survival as well as its subsequent growth by regulating the amount of expenses directed towards footing off certain things (Morrell 83). Intrinsically, research based on ways in which employees can air out their views suggested that, even companies depending directly to other companies for essential commodities could instill a go slow or any other measurable method in order to push for better services, reasonable prices, and relative means of operations (Vasigh, Ken, and Liam 111). As a result, this paper finds it necessary and understandable to recommend that the US Airways in association with the other airlines to initiate measures that can push aircraft fuel dealers to reduce their prices. Stopping exploitation in the name of fuel pricing is one way in which this airline can overcome the ongoing problems intimidating its existence (Allaz 118). Spectacularly, the first step that the US Airways should take in order to solve its major problem of unforeseen predicaments that result from mergers is to calculate the amount of expenses that the company will incur before and after the merger (Lu 100). Finally, the airline can implement the solutions provided by simply acting on them following the necessary procedures. This involves employing a reasonable number of employees, advocating for realistic fuel prices, and introducing friendly, favorable, and attractive customer services to its clientele (Taneja 130). If the US Airways can resolve to initiate these recommended solutions, it can achieve generous benefits after a period not exceeding six months. This may happen due to the insignificant yet realistic hard economic times so customers will rush for low cost airlines with additional benefits (Gebman 56). These solutions should take place with immediate effect in order to achieve the expected benefits. 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