Alaska Airlines Essay

4491 Words Dec 23rd, 2010 18 Pages
Alaska Airlines

Strategic Management Model

Linda Gay Cahill
Table of Contents:

Strategic Profile Company Introduction 3
Strategic Analysis PEST Analysis (Political, economic, social & technological factors) 4 Resource-Based View 6 Value Chain Analysis 8 SWOT Analysis 11
Strategy recommendations 13
References 14
Company Introduction

Alaska Airlines is the ninth–largest U.S. airline based on passenger traffic and is the dominant U.S. West Coast air carrier. Headquarter in Seattle, Washington, Alaska carriers more passengers between the state of Alaska and the Lower 48 than any other airline. During recent years it has expanded significantly to serve more U.S. East Coast,
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The economic levels of the households and businesses rely heavily on the amount of disposable income and company transportation expense for air travel. Our current economic state yields households and businesses to hold on to their capital.

Oil price fluctuations have a great impact on earnings in the airline industry. In the past year it has been as high as $128/barrel and is currently at $74/barrel (Feb. 2010). In 2008-2009 several airlines suffered significant declines in their earnings based on this expense. Airlines will need to find non monetary strategies to fight this expense. They could try price hedging or joining an airline alliance/partnership in order to increase fuel buying power. This would allow airlines to buy fuel in larger quantities and create contractual agreements with oil suppliers.

The airline industry will face many social issues in the next few years. The United States Government Accountability Office recently predicted that 70 percent of the air traffic controller will retire within the next ten years due to age. 12 Air traffic controllers work for FAA and are paid through a ticket tax that goes to Airport and Airway Trust Fund so the cost of staffing and training new air traffic controllers will be passed on to passengers through an increase in these taxes. This raises the cost of tickets for all airline companies.

FAA is also

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