The Operational Strategies of the Global Airline Industry - Term Paper Example

Historically BMI evolved from the Derby Aviation Limited created in 1949 and changed its name to British Midland Airways in 1964 after the acquisition of the Manchester Airport based schedule and the Mercury Airlines. A significant change took place with it joining the Star Alliance in 2000 followed by rebranding the airline with BMI. Since then its labyrinthine process of evolution was coloured by a variety of twists and turns, some positive and some negative. On the other hand United Airlines began its commercial flights way back in 1926, in the US.

Its original name was Varney Airlines founded by Walter Varney in Idaho. In 1927 Boeing Airtransport bought Varney Airlines. With the decline of the Pan American World Airways, United Airlines purchased the former in 1991 along with its rights over the routes to the London Heathrow Airport. It co-founded Star Alliance in 1997 and formed a marketing partnership with Delta Airlines in 1998. Except for its Boeing connection, the rest is history.       BMI and United Airlines have been faced with stiff competition and dwindling sales through both in common have been able to withstand pressure to curtail operations in some of the key sectors.

Doganis (2002), begins his book ‘Flying Off-course: the Economics of International Airlines” with the remark that the international airlines' industry has invariably produced a paradox for the last 50 years by growing rapidly despite marginal profits. This statement essentially captures the modern day reality of international airlines, viz. expansionist forays into an array of sectors and segments but very little profit growth due to escalating operational costs, including labor.     BMI and United Airlines have not escaped from this reality either.

Thus this comparative analysis of the two airlines is determined by the modern day dynamics of the industry irrespective of their directional thrust. For instance, BMI has been experiencing some of the negative trends in cost management, labor relations, profit margins, international HRM practices, pricing policies, and management style.