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United Airline Case Report

In: Business and Management

Submitted By woshiqr
Words 2149
Pages 9
Group 4


1. Industry Background
1.1. Poor Customer Reputation The US airline industry has been criticized for poor customer services, inefficient operations, and frequent flight delays for quite long time. Poor reputation seems to have been a typical characteristic of the whole industry. According to the customer satisfaction survey conducted by ACSI in 2014, airline industry ranked at the 40th place among all the 43 industries involved, ahead of only Internet service providers, social network corporations, and cable TV operators. 1.2. Intricate Challenges These years, the US airline industry suffered a lot from plenty of problems. The 9.11 attacks had dealt a crushing blow to the whole industry which made the airline lose much money and some of them even filed for bankruptcy. With teleconferences used to substitute for in-person meetings, travel budgets for businesses declined which reduced the airline’ revenues from first-class and business-class passengers and lowered the profit margin. Besides, the Great Recession damaged passengers’ purchasing power as well as their willingness to purchase. Data shows the US domestic average itinerary fare experienced an obvious downward trend from the year 2000. And the skyrocketing oil price increased airline’s cost to a great degree as for every one percent increase of crude oil price, airline’s net profit would decrease by more than two percent. As a response, many airlines reduced scheduled fights, cut employees and reduced wages. Even so, it was hard for airlines to escape from the dark times. 1.3. Significance of customer satisfaction When the airline industry was in the trough, the ability to satisfy customers’ needs and provide them with enjoyable flight experiences meant a lot. Southwest Airline benefited from this competitive advantage. As a low-cost carrier, Southwest…...

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