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US Airways Group - Putting It All Together - Essay Example

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U.S. Airways group is currently the fourth largest commercial airline in market share currently in the domestic market. The first three major competitors for U.S. Airways currently holding a combined 42% of the domestic market are Delta, American Airlines and South West Airlines…
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US Airways Group - Putting It All Together
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Download file to see previous pages In a market characterized by low-fares, high volumes, traditionally basic services such as in-flight meals and movie were included in the fare price but in today’s fierce operating environment airlines have resulted to charging extra for these services in an effort to offer the lowest selling price possible for the passengers.
U.S. Airways is suffering from an image problem, where it is collectively viewed as one of the least admired corporations in its industry sector. In the Fortune 1,000: Most Admired Companies 2006, U.S. Airways received the lowest score out of ten of the major airlines in the U.S. Even in the 2011 Fortune survey with added competition from other major airlines out of the twelve companies surveyed only AMR received a lower score than U.S. Airways. Furthermore it has not improved in any of the attributes surveyed in the study (Cnn, 2011). It is clear that U.S. Airways needs to address its quality of service in order to increase its market share in the domestic market as well as successfully entering into the global airline market. The airline industry in general is very susceptible to external economic, legal and political factors which can deeply affect its day to day operations. The recessionary economic conditions in the domestic economy as well as internationally significantly affected the airline industry particularly in the years 2008-2009 where most major airlines reported operational losses. Price gouging and intense competition have been a defining characteristic of the industry ever since the deregulation of 1978. After the 2010 travel season with slight improvement in the domestic and global economy the airline industry has been able to bounce back maintaining full occupancy rates for its flights and has once again reached profitability (Yahoo, 2011). One of the biggest costs for any airline is the cost of fuel, so in general the industry is particularly vulnerable to fuel price increases (Datamonitor, 2011). Regardless, rising costs and the volatility of fuel prices has cut the average margin of the airline industry to only 2%.U.S. Airways as a whole needs to improve the customer satisfaction rate by improving their customer service, improving the quality of its services, and decreasing the percentage of delayed flights. They also need to improve the speed of the boarding process in order to improve customer satisfaction. These are some of the things that U.S. Airways management needs to address in order to improve their market share and increase revenues. The airline industry has always been characterized for being a highly regulated industry with various federal agencies overseeing their operations from a safety and security standpoint. The Federal Aviation Administration (FAA) is responsible for regulating and ensuring the overall safety of all civilian as well as commercial flights in the domestic airspace. All airlines operating in the domestically are subject to the rules and regulations of the FAA. The FAA has the authority to issue any directives or changes in procedures, including aircraft maintenance. For U.S. Airways the adequate planning and budgeting of enough cash reserves, manpower, airplane inventory and financial resources to meet with the changing operational demands of running a domestic and global airline must be factored in the strategic and contingency planning of the company. There is a high degree of complexity in the operation, maintenance and repair of commercial aircrafts. As a consequence there is a high level of added costs ...Download file to see next pagesRead More
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