Aviation Business: Competition

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TOPIC: COMPETITION

Read the introductory text about competition in the airline industry.

 

The aviation industry is a highly competitive market and is a true rollercoaster ride for some airlines. While industry majors are used to competing on a large scale, there are successful low-budget carriers, like JetBlue or Southwest, that trigger a competitive mode even with the big guys.

In fact, JetBlue did so well at the beginning of the millennium that Delta and United launched JetBlue’s mini-rivals  -“Song” and “Ted” – an attempt to beat JetBlue and increase their market presence. They were disbanded and discontinued shortly after their launch (Link). While industry majors’ offspring failed to replicate JetBlue’s success, there is one carrier that still manages to keep up  – Southwest.

Watch the analytical report “Southwest vs. JetBlue” on FoxNews:

Watch Video

1. Determine whether the following statements are true or false:

1)     Southwest Airlines took off in 1966 when its co-founders got together to start a different kind of airline (Answer: T)

2)     In 1984 Southwest came last in customer satisfaction, 4^th year running (Answer: F)

3)     JetBlue was founded by a former Southwest Airlines employee (Answer: T)

4)     Southwest and JetBlue, according to some airline analysts, have not even started their competition yet, because they have been servicing different parts of the country (Answer: T)

5)     Analysts predict that the true head-to-head may start on the Boston-Baltimore route (Answer: T)

 

1. Take a look at the grids below. Fill in the info that’s missing:

Southwest Airlines

 

1. Year Founded: 1966
2. Philosophy and Characteristics: low fares, on-time destinations, short-haul flights, full service, …………. (?) style
3. What 1000 shares gets you: USD 18.500 (2002) and USD 7070 (?)
4. Scale: national
5. Sponsorships: ?
6. In–Flight Amenities: basic, testing WiFi

JetBlue Airlines

 

1. Year Founded: ?
2. Philosophy and Characteristics: style, service and choice, low-cost travel but no skipping on the amenities
3. What 1000 shares gets you: ? (2002) and USD 4800 (2009)
4. Scale: regional
5. Sponsorships: none
6. In–Flight Amenities: ?

Answers:

Southwest -> 2) quirky style, 3) 2009, 4) NFL

JetBlue -> 1) 1999, 3) USD 44.200, 6) Live TV and WiFi

3. Find pairs for words by matching columns:

1)     heated

2)     to ground

3)     to propel

4)     customer

5)     to battle it

a)     competition

b)     through

c)      out

d)     carriers

e)     satisfaction

Answers: 1a, 2d, 3b, 4e, 5c

1. 3. Understanding words in context:

1)     When the news anchor says that “carriers were grounded” by several factors, like recession and oil prices, she means: a) aircraft crashed, b) airlines were hurt financially, c) airlines became down-to-earth (Answer: b)

2)     When experts say that the real “head-to-head” for Southwest and JetBlue will most likely happen when their interests clash on the Boston-Baltimore route, they mean: a) confrontation or competition will start on that route, b) there might be collisions on that route, c) the airlines will fly together on that route (Answer: a)

3)     When the airline industry expert says that in-flight entertainment , like live TV, “put JetBlue on the map”, she means: a) JetBlue got listed on a map, b) JetBlue caused uproar, c) JetBlue became popular through in-flight entertainment (Answer: c)

4)     When experts say other carriers are pulling out and “letting Southwest and JetBlue fight it out” on certain routes, they mean: a) they are waiting for these 2 airlines to compete against each other, b) they are unwilling to compete with JB and SW and letting them decide who wins the competition, c) they are fighting these 2 airlines (Answer: b)

5)     When the news anchor says that the 2 airlines are “battling it out on Wall Street”, she means that: a) they are competing fiercely on the streets of Manhattan, b) they are competing in terms of revenue on Wall Street, c) they are in a fight over Wall Street (Answer: b)

1. 4. Answer the following questions based on what you have just watched:

 

 

1)     According to Helane Becker, which airline is better positioned financially today? (Answer: Southwest)

2)     From a marketing standpoint, which of the carriers is doing better and why? (Answer: Southwest – it is much more national and sponsors NFL)

3)     How does Bob McAdoo evaluate their possible competition in case their routes overlap? (Answer: he thinks it’s going to be fun, as the airlines will go head-to-head and that is going to help the consumers)

4)     What have both airlines done to keep their employees excited and happy? (Answer: in the tough financial times they have not practiced lay-offs unlike many other companies)

5)     What is the name of the airline that has recently acquired 19% of JetBlue? (Answer: Lufthansa)