Structure of Major US Air Carriers and the Relevant Theories
Select one of the topics below and write a minimum 1000 word document using APA formatting (double space, cover page, header, reference list). You must also use at least three (3-5) academic references. Sources such as Wikipedia, Yahoo-answers and blogs are not acceptable academic resources. References must be no more than 5 years old.
Sections of the paper should include:
1. Introduction -- What event did you choose and why was it theoretically interesting?
2. Relevant theories -- Which theories did you choose for your "short list" and why?
3. Event description -- What happened?
4. Theory selection -- Which theory "fits" the event best? Why? What makes the theory you chose better than your other options? Explain the theory in this section.
5. Theory evaluation -- What are this theory's strengths in helping you to observe, describe and explain the event? Would the theory help you predict what might happen in similar events in the future? How so?
6. Critique -- What are the limitations of your observation? What are the limitations of the theory? What ideas for further research and theory-building do these limitations introduce?
Structure of Major Us Air Carriers
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Structure of Major Us Air Carriers
Introduction
The American Airline Industry has witnessed increased labor and fuel costs and growth in the intermodal competition for some year years now. Some major American airlines such as the JetBlue, Southwest, and AirTran have as a result changed operating results for many traditional airlines. Increased operating costs and competition in the industry was seen as a threat to survival by other operators including United, American, US Airways, and Delta. These operators opted for reorganizing and emerged successfully but still, US Airways struggled. This paper explains the structure of major us air carriers by analyzing the characteristics and operating strategies of three major US airlines.
Relevant Theories
The US airline industry can be explained using game theory. This theory explains that the industry is notoriously difficult and besieged by fare wars, unstable fuel and labor costs, complex routing logistics, unpredictable weather, occasional volcano as well as expensive equipment and companies had to play a game by choosing to co-operate or not (Chung & Petrick, 2013). The other theory is economic theory which explains that the structure of major US air carriers is based on economic reasons or cost saving (Vasigh & Fleming, 2016). This theory focuses majorly on labor and fuel costs. Lastly, contestability theory states that the US airline industry is generally independent (Borenstein, 2017). This economic concept explains a market with only a few players and how they behave in a competitive way.
Event Description
JetBlue is located in New York’s John F. Kennedy International Airport. JetBlue is a fast-growing American airline whose strategy is to offer low-cost services in one class of their aircraft. It once offered 36 setline TV channels for every seat. It was also the first company to introduce “paperless cockpit” technology and the first to become 100% ticketless (Chung & Petrick, 2013). JetBlue’s routes were point-to-point and flights were long-distance and non-stop. It primarily competes with United, American, and Southwest while its direct competitor in Florida is US Airways.
AirTran is based in Atlanta and makes over 700 departures across more than 55 cities in a day. It trips are to the Midwestern and Eastern destinations and it mainly competes with Southwest, US Airways, and Delta. Their strategy is focusing on leisure and business travels at low cost (Chung & Petrick, 2013). They also have one of the lowest labor costs in the industry. They also make large deliveries using Boeing carriers. It also operates hub-and-spoke network outside Atlanta, something that Southwest does not have. Their top competitor in Orlando is US Airways and Delta in Atlanta.
Southwest is based in Dallas and has enjoyed over 40 ye...