Strategic Management in a Global Context

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Strategic Management in A Global Context
Instructor: Mark Louis Ulrich
Team Project
By: Amer Nasser
Hanh Nguyen
Lars Boelke
Wila Yu
Airline Industry
History:
The first ever scheduled airline was launched in St. Petersburg, Florida, a city not generally considered that can boast of an aviation. But on January 1, 1914, the St.
Petersburg-Tampa Airboat Line was born there--the world 's first scheduled airline using winged aircraft. A plaque on the entrance to St. Petersburg International Airport proclaims: "The Birthplace of Scheduled Air Transportation."
Since then the industry has faced dramatic growth. Especially in the post WWII period, with the rising of jet engine planes the number passengers raised from year to year.
Among the first internationally operating airlines were Lufthansa, founded in1926 and
Air France, founded in 1933. Other commercial Airlines were founded such as the famous Pan Am and disappeared again.
Today, the world’s airline sector is dominated by large national Carriers who have for a
2
long time been under the influence of national governments. Only since 1978 deregulations formed a competitive market as direct subsidiaries consequently were abolished and the airlines were turned into independent, often stock-listed, companies.
This step helped to complete the transformation from of air travel from a luxury to as mass-market. However, during the last 4 years, airline industry faced major problems and profits were hardly earned. The challenge for al operating airlines today is to cut costs per passenger-mile and increase their network to offer best service at lowest costs.
Key Success Factors
Never the less the worlds airline sector indices have substantially under performed over the past 20 years. Key factors explaining this failure and affecting the industry are: Overcapacity and still government interference Fix cost business Passenger numbers major impact on profitability Payments of landing slots



Cited: Card – 14th Ed Irwin: McGraw-Hill, 2004 Emirates Website, 3 Nov Rafi-uddin Shikoh, Airline Business, Sep 10, 2005 http://www.skywards.com Swiss Air website, 11 Oct. 2005 < http://www.flybaboo.com/about/about_us.html> “South Airline”, 11 Oct Korean website, 11 Oct. 2005 <http://cargo.koreanair.com/eng/InterNet/aboutus/aboutus_company02.jsp?m

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