The Airline industry is characterized by strategic management and competitiveness. The paper seeks to provide information concerning the impacts of the changes in technology and globalization on the airline industry. Furthermore, the paper would also integrate the resource based model and the industrial organization model to try and determine the above average returns witnessed in the Airline industry. The paper seeks to analyze a case involving the Southwest Airlines.
The globalization process has come to be one of the driving factors of business in the modern era. Some of the elements which contribute significantly to globalization include culture, environment, technology and regulation. With the advancements in globalization, there has …show more content…
The legislation caused many companies to enter the airline industry especially when the airline business was considered very profitable. With new entrants into the airline industry, there was a significant reduction in the airfares. The decrease in the airfares was mainly attributed to the new deregulation act of 1978. The legislation encouraged competition in the airline industry. As a result, there was new competition financial impact in the airline industry. Another challenge experienced in the airline industry concerned the cost of fuel. The airline industry was not the first choice for travelers when the prices of fuels inflated significantly (Bhadra, 2010). Fuel cost is among the most important factors to consider when planning and preparing for trips. Other key concepts in the airline industry include the customer service and the cost of …show more content…
Some of the main contributors to the growth of the airline industry include world trade and tourism, international investment, and economic growth. A huge portion of the profits come from world trade and economic growth (Kroo, 1999). According to a report in 1991, there was a significant drop in the rates of airfare. After the Airline Deregulation Act of 1978, there were financial challenges and deficits that were observed because of the large growth rate experienced in the 1980s (Kroo,
The globalization process has come to be one of the driving factors of business in the modern era. Some of the elements which contribute significantly to globalization include culture, environment, technology and regulation. With the advancements in globalization, there has …show more content…
The legislation caused many companies to enter the airline industry especially when the airline business was considered very profitable. With new entrants into the airline industry, there was a significant reduction in the airfares. The decrease in the airfares was mainly attributed to the new deregulation act of 1978. The legislation encouraged competition in the airline industry. As a result, there was new competition financial impact in the airline industry. Another challenge experienced in the airline industry concerned the cost of fuel. The airline industry was not the first choice for travelers when the prices of fuels inflated significantly (Bhadra, 2010). Fuel cost is among the most important factors to consider when planning and preparing for trips. Other key concepts in the airline industry include the customer service and the cost of …show more content…
Some of the main contributors to the growth of the airline industry include world trade and tourism, international investment, and economic growth. A huge portion of the profits come from world trade and economic growth (Kroo, 1999). According to a report in 1991, there was a significant drop in the rates of airfare. After the Airline Deregulation Act of 1978, there were financial challenges and deficits that were observed because of the large growth rate experienced in the 1980s (Kroo,