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The US Airline Industry in 2012

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Case Analysis: The US Airline Industry in 2012

Perform a brief case analysis of "The US Airline Industry in 2012" case using Wertheim's Case Analysis and Problem Solving Model. For this assignment, do only steps 2 & 3 (Define the problem; Causes). After reading the case, use Wertheim's Model to define the major problem and then use Porter's Five Forces analysis to outline the causes of the problem. This short paper should be not more than three pages.

Wertheim's Case Analysis and Problem Solving Model link -
http://www.mbadepot.com/external_link.php?ID=915&url=http%3A%2F%2Fwww.iterasi.net%2Fopenviewer.aspx%3Fsqrlitid%3D8vrzmbofn06dsqdpurz9aw

Porter's 5 Forces link - http://www.themanager.org/models/p5f.htm

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The US Airline Industry in 2012

The critical issue in the case study, "The US Airline Industry in 2012" is stabilizing the industry's cost and demand factors to allow it to grow and prosper. The author describes the history of the industry as well as a number of factors that have impacted the industry. The airline industry has experienced tremendous growth and is the "dominant mode of long-distance travel in the US" (Grant, 2013), however, the industry's profits have been low, with a "dire" financial picture. It is especially telling that "the total market capitalization of all quoted US airline companies was $30.1 billion--less than the market value of Starbucks, less than one third of the market value of Facebook on the day of its initial public offering, and about one-half of that of the industry's major supplier, Boeing" (Grant, 2013). The problem has many root causes, including legislation, dynamic costs, and weak economy. While these issues are not new, it is difficult for the industry's organizations to manage. On one hand, the organizations are limited by increasing fuel and labor costs, fluctuations in the economy (which impact the amount of travel that occurs) and capacity utilization. On the other hand, consumers demand lower fares and a modicum of service. A snapshot of the problems the industry faces can be revealed as the author describes the benefits of leasing newer equipment to take advantage of the fuel efficiency these planes offer. While this is a positive factor, the fuel efficiency must be weighed with the cost of acquiring the equipment. The airline industry must determine the right mix of fares, services and routes to offer while balancing theses costs ...

Solution Summary

This detailed solution is a brief case analysis of "The US Airline Industry in 2012" case using Wertheim's Case Analysis and Problem Solving Model. For this assignment, the problem is defined and causes are given. Wertheim's Model is used to define the major problem and then Porter's Five Forces analysis is used to outline the causes of the problem. Includes APA formatted references.

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See Also This Related BrainMass Solution

Current state of union relations in the airline industry

Labor Laws, Unionization, and the Workplace
A good place to start familiarizing yourself with legal issues involving unions in the workplace is by looking over the National Labor Relations Board website, http://www.nlrb.gov/nlrb-process
Be sure you are familiar with the following laws and their amendments:
Labor-Management Reporting and Disclosure Act (Click on the link for a brief overview.)
National Labor Relations Act (Click on the link for a brief overview.)
Labor Management Relations Act or Taft-Hartley Act (amended the NLRA). (Click on the link for a very brief introductory overview.)

Case Assignment:
After you have reviewed the above laws, read the following articles concerning labor unrest at American Airlines.
American Air pilots' union: no strike unless it is legal. (August 30, 2012). Retrieved August 31, 2012, from http://www.reuters.com/article/2012/08/30/us-americanairlines-pilots-idUSBRE87T14O20120830
DeMaura, Stephen. (August 13, 2012). Not just public unions: private sector unions hurting business. Retrieved August 31, 2012, from http://townhall.com/columnists/stephendemaura/2012/08/13/not_just_public_unions_private_sector_unions_hurting_business/page/full/
Saporito, Bill. The worst job in America. (October 8, 2012). Time Magazine (Vol 180, Issue 15). From Business Source Complete.
Assignment:
Give a brief summary of the current state of union relations in the airlines industry in the United States. Then, answer the following in a well-organized 4-5 page paper:
If Mr. DeMaura is correct in his editorial, why would the American Airlines' Allied Pilots Association (APA) risk the future of American Airlines with their union demands?
Using additional research about unionization in the U.S. airline industry, and American Airlines in particular, update where we are today with American's situation. How do the recent updates that you have found affect American Airlines employees? Are other U.S. airlines also in jeopardy because of labor demands?

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