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National Air Sapce - Essay Example

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This has created the dilemma of whether the companies should cancel their orders because their older aircrafts can still operate at a profit. The airlines will however not cancel the…
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National Air Sapce
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National air space Air companies begun ordering aircrafts that are fuel-efficient but fuel prices are decreasing. This has created the dilemma of whether the companies should cancel their orders because their older aircrafts can still operate at a profit. The airlines will however not cancel the contracts because of legal, social, and economic reasons.
Social responsibility and its associated benefits is one of the reasons for upholding the contracts. Even though the new aircrafts will be costly to the companies, the efficient fuel consumption will ensure environmental health with positive impact on the human population, beyond aircraft users, and economic activities that affect people. Such a responsibility is likely to generate competitive advantage. In addition, Greenberg, McKone-Sweet, & Wilson (150) explain that premium customers are likely to offset social cost of service delivery and this will manage cost implications of the orders on the airline companies. The identified fuel efficiency will also reduce cost in the long term and increase long-term profitability. Legal obligations and consequences of breach of contract will also motivate the airline companies to uphold the orders and two possible remedies to breach of contract explain this. The companies will still be forced to make the purchases under the doctrine of specific performance and this will mean wasted time and money in judicial processes. Cancelling the contracts will also lead to monetary expenses in damages should the companies be allowed to cancel the contracts but this would still be costly (Schaffer, Agusti, & Dhooge 108).
Upholding contracts for the new aircrafts offers advantages such as competitive advantage due to social responsibility, increased profitability due to fuel efficiency, and ability to raise prices among premium customers without reducing utility. Cancelling the contracts would however have legal implications into unnecessary financial losses.
The companies will therefore go ahead with the contracts because of the many advantages of the move and disadvantages of cancelling the contracts. These motivate purchase of the new fuel-efficient aircrafts.
Works cited
Greenberg, Danna, McKone-Sweet, Kate, & Wilson, James. The new entrepreneurial leader: Ddeveloping leaders who shape social and economic opportunity. San Francisco, CA: Berrett-Koehler Publishers, 2011. Print.
Schaffer, Richard, Agusti, Filiberto, & Dhooge, Lucien. International business law and its environment. Stamford, CT: Cengage Learning, 2014. Print. Read More
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