Eastern Airlines' Future Perspective - Essay Example

Running Head: AVAITION Eastern Airlines: Recommendations for future perspective Introduction In the long term success and sustainability of the business organization, there is a significant role played by its strategic orientation and operational activities. In regard to this, the quality of the business related operational activities of the organization is directly linked with the perception of customers about the company, which is quite essential aspect of the long term sustainability of the organization in highly competitive marketplace. There are a number of examples of companies which has been become defunct because of the fault in their operational activities. In this context, the example of Eastern Airlines can be taken into consideration. Eastern Airlines was one of the major airline companies based in the USA. The company was founded in the 1926 and headquartered at Miami International Airport, Florida. The company ceased its operations in January 18, 1991. The paper is directed to reveal some of critical reasons due to which Eastern Airlines had to be out of the business. For this purpose, the paper throws light of conditions of different crucial operations of airlines such as route structure, fleet, marketing, and business plan when they went out of business. In addition to this, the paper also provides some of the crucial recommendations to the company regarding different areas of business operations, which can allow the company to remain in the competition. Status of airline’s operations at the time when they went out of business There were a number of different reasons behind the demise of Eastern Airlines. Ill-business operations were one of them. There were several shortfalls in the different areas of its operations such as route structure, fleet, marketing, and business plan. From the perspective of route structure of the company, the span of business activities of the company was quite restricted. The international business of the company was not quite developed as it was expanded in Mexico, Caribbean and Canada only. The major hubs of the company were Charlotte/Douglas International Airport, Hartsfield Atlanta International Airport, John F. Kennedy International Airport (New York City), Kansas City International Airport, LaGuardia Airport (New York City), Luis Muñoz Marín International Airport (San Juan), and Miami International Airport. In this way, the route structure of the company at time when they had to cease their operations was quite centered in the North American continent. The lack of international flights was major aspects of the business operations of the organization that made the company worthless for international passengers and tourists (Eastern Air Lines, Inc, 2012). In addition to this, from the perspective of feet size, the company was not in the favorable conditions. In regard to this, total fleet size of the company was 242 at the time when they became out of the business. Among this figure, about 11 fleets were scrapped and written off. The prime fleets for the company were Airbus A300, Boeing 727, Boeing 747, Boeing 757, Douglas DC-8, McDonnell-Douglas DC-10, and McDonnell-Douglas DC-9. These all the fleets were based on older technology. Moreover, for the purpose of accomplishing the need of the large size customer base, small fleet size of the company was not quite enough, which provide the scope to the passengers to switch the company (Eastern Air Lines Fleet Details and History, 2003). Marketing is one of the major aspects of the success of any business organization in competitive business in this context, marketing activities of the company was not also quite focused. The company adopted reactive marketing approach for the purpose of averting stiff competition provided by no-frills airlines, such as People Express. Along with this, other international carriers such as American airlines, British airways, Lufthansa German Airlines, and Sabena Belgian Airlines, have also affected the business and revenues of the company. After getting affected by critical competition, in mid 1980s, the company has started its new marketing campaign. The focus of this marketing campaign was on highlighting the quality of services, and competencies of its highly experienced pilots (Bernstein, 1999). Along with this, the business plan of the company was also a crucial reason behind the demise of the company. The lack of progressive approach was the prime negative aspect of the business plan adopted by the company. In direction to this, business plan of the company was focused only on rectifying the existing shortfalls of the company. There was no any attempt made by the company to expand or develop its new markets and fleet competencies. Human Resource Management is also one of the crucial aspects of the business plan of any company. In this regard, the company was not proved effective in developing some crucial human resource related strategic plan which was reflected in strikes, empty planes, and mass layoffs (Bernstein, 1999). These are some of the critical shortcomings of the business operations undertaken by Eastern Airlines that became one of the critical reasons behind its bankruptcy and ceasing of operations. Recommendations for the company for being in the business today There are different critical issues related with the business operations of the company that forced it to get out of the competition. The company had to cease its operations in 1991. On the basis of the analysis of company’s operational efficiency at the time when it went out of business, and review of existing business environment for global Aviation industry, some crucial changes can be recommended that would be helpful for the company to be in the competition in existing period of time also. In this regard, first recommendation can be given in the context of expansion in the route structure of the company. At the time, when company went out of the business, the route structure for the company was quite restricted and expanded in the Northern American region only. However, in existing period of time, trends and practices related to the aviation industry has been changed quite intensively. Globalization and liberalization has made it quite crucial for the company to expand its business activities in other regions such as Middle East, southern Asian region, and Asian-Pacific region. These regions are quite potential from the perspective of business and tourism. In this regard, expansion in the route map and structure of the company would help the company to cater a large customer base. For this purpose, the company can also adopted strategy of undertaking strategic alliance with other established Airlines for the purpose of having hassle free entry into new market (Delfmann, 2005). In addition to this, the company would also require to enhance its technical competencies prevailing in its fleet strengths. As aviation industry has become quite advanced from the perspective of technical innovations. There are a number of different highly advanced and effective technological innovative measures are used by airline companies to improve their overall competencies and efficiency. In direction to this, the company would be recommended to add some new and highly advanced fleets in its portfolio. With the increase in international business activities of the organization, the demand of the customers would also be enhanced. Owing to this reason, the company would need to expand its overall fleet size so that it can be able to accomplishing the demand of customers (Flouris & Lock, 2009). Along with this, the company is also recommended to change its marketing approach. As per the demand of the existing business environment, the company requires to have proactive approach towards its marketing strategy. The company should have some advanced and effective strategies as well as policies for the purpose of addressing competition and dynamic conditions of the market. in this regard, the company should be quite focused on direct marketing and e-marketing measure to attract its customers. Earlier, there was no any significant marketing and promotional activity taken into consideration by the company. Nowadays, the company should allocate some significant amount of budget in promotional activities. In this aspect, the company should provide promotional offers, seasonal discounts, differentiated pricing policies for attracting mass and frequent bookings, free gifts and effective customer care services to the passengers. With the help of such crucial marketing initiatives the company would be allowed to enhance its overall customer base in the market (Shaw, 2012). Another crucial aspect in which, the company will have to make amendments in the quest of success in existing period of time is its business plan. In this context, the company is recommended to have business plan which is quite progressive and growth oriented. In this plan, different programs regarding expansion of market, fleet size, operational efficiency, frequency of flights and route structure of the airlines, should be provided with some intensive amount of weight. The company should also focus on enhancing the HR competencies and skills. For this purpose, there is a need of having some intensive and focused training and development to the employees so that they can be able to perform their assigned tasks in the most effective manner. This will also lead to enhance overall competencies, skill, understanding and satisfaction level, which will lead to decrease the incidents such as mass layoffs, and strikes (Flouris & Yilmaz, 2011). Conclusions: These are some of the crucial recommendations for the company, which would be proved quite effective for it be in the competition in existing highly competitive and dynamic global aviation industry in contemporary period of time. References Bernstein, A. (1999). Grounded: Frank Lorenzo and the Destruction of Eastern Airlines. Beard Books. Delfmann, W. (2005). Strategic Management in the Aviation Industry. Ashgate Publishing, Ltd. Eastern Air Lines Fleet Details and History. (2003). Retrieved April, 12, 2013, from http://www.planespotters.net/Airline/Eastern-Air-Lines Eastern Air Lines, Inc. (2012). Retrieved April, 12, 2013, from http://www.stocklobster.com/2151.html Flouris, T.G. & Lock, D. (2009). Managing Aviation Projects from Concept to Completion. Ashgate Publishing, Ltd. Flouris, T.G. & Yilmaz, A.K. (2011). Risk Management and Corporate Sustainability in Aviation. Ashgate Publishing, Ltd. Shaw, S. (2012). Airline Marketing and Management (Epub). Ashgate Publishing, Ltd. Read More