You are on page 1of 26

Case study

America West Airlines

Introduction

AWA was established in Phoenix as an employee owned organization and it began by serving 10 cities in the southwestern United States with a new Boeing 737 aircraft. Major issues to discuss in this case are: Major competitors -services and offering Distinguish characteristics of AWA Analysis of relative performance of different Airlines Potential threats for AWA (then we will deal with the questions given in case study- strategy adopted by AWA and its critical analysis, what are the service winners, qualifiers and losers in the AWAs market,strategic service vision of AWA

Competitors
Three

major competitors of AWA:

Airlines American Airlines Delta Airlines Among these competitors southwest airline was giving the tough competition to AWA and was presenting a competitive challenge.

Southwest

Services & offerings


1)

a.
b.

c.

Southwest Airline frequent, low cost flight with Boeing 737 aircraft Southwest hub at Love Field in Dellas-easier access both to and from city-attractive for commuters Reservation for flights could be made by phone but now the passengers have the luxury of purchasing tickets online or from the Southwest's version of ticketing ATMs located in many airports.

d) No preassigned seating was available it was handled on a first come first serve basis. e) On board amenities free soft drinks, juice and peanuts. Prepackaged cookies and crackers with cheese or peanut butter available on long flights, and alcoholic beverages are available for a price.

Offerings of American Airlines


Eight

flights each day. Each flight lasting at least five hours 60 minute layover in Dellas $298 for Americans least expensive flight.

America West Airlines services

Four flights each day Each flight lasting 4.5 hrs. One layover of 30 minutes in phoenix Least expensive fare $238 Major hub- phoenix Comfortable Accommodations at phoenix airport Spacious waiting area with banks of well pedded seats, television monitors ,concessions by nationally known food franchises- whole package of services at waiting area make them feel at home.

On

board amenities include complimentary copies of USA Today and The Wall Street Journal and on longer trips an uncooked snacks such as a sandwich ,salad ,cheese,fruit,and dessert. Preassigned seating can be done by telephone and travel agents can book the ticket for passengers using the SABRE reservation system.

Relative comparison of different Airlines


Airlines No of flights Time taken by each flight America West Airline Four flights each day 4.5 Hrs Southwest Airline NA or same as AWA American Airlines Eight Flights each day 5 Hrs

Layover time One layover of 30 min


Least expensive flight cost $238

Routing might involve several lengthy layovers.

60 min layover

$298

America West Airline & Southwest Airline


1)

Layover facilities like-accommodation, spacious waiting area, well-pedded seats, Television monitors, concession by nationally known food franchises provided by AWA. Southwest Airlines provide the facility of booking the tickets online over internet or by ATMs located in many airports whereas in case of AWA ticketing can be done by using SABRE reservation system.

2)

Preassigned seating can be done by telephone in case of AWA whereas in case of Southwest Airline no preassigned seats are available it is handled on a first come first serve basis. 5)On board amenities provided by SWA- free soft drinks, juice, and peanuts. Prepackaged cookies and crackers with cheese or peanut butter are available on long flights ,and alcoholic beverages are available for a price. On board amenities provided by AWA-includes complementary copies of USA Today and Wall Street Journal and on longer trips an uncooked snack such as sandwich, salad, cheese, fruit, and desert.

4)

Threats for AWA

Southwest Airlines presented a competitive challenge different from American and Delta SA serving the same general region as America west SA also offering frequent, low cost flights with Boeing 737 aircraft

Competing head to head and might be destined to flight to the finish of one of them.
SA establishes its hub at Love Field in Dallas, offering easier access both to and from city attractive to commuters

SA has set the gold standard for safety, efficiency and satisfaction in the skies
SA also leads in pricing, on time arrival and no frills service, others still follow.

Strategy adopted by the AWA


Target
Entire Market Market Segment

Strategic Advantage Low cost Uniqueness Overall cost Differentiation leadership


Focus

Critical analysis of these strategies


Advantages of focused strategya) Better consumer satisfaction b) Benefits small business c) Competitive advantage

Dangers of focused strategya)Reduced opportunity for expansion b) Threat of competitors c) Wrong segment identification

Advantages of low cost leadershipa) Protected from industry competitors b) Ability to reduce price to compete with substitute products. c)Low costs and prices as a barrier to entry

Dangers of low cost leadershipa) b) c)

cost reduction methods are easily imitated or copied by other firms. Competitors may lower their cost structures. Cost reductions may affect demand.

Advantages

a)
b) c)

of differentiation strategyBrand loyalty Innovation Barriers to entry

Disadvantages of differentiation strategya) Expensive b) Difficult to sustain for long-term

Service Qualifiers: Safety Good quality aircraft Trained personnel Service Winners: low cost More flights Ease of booking Shorter duration of flights feel at home Convenience Shorter layover time Service Losers: Cost advantage Layover time Uncomfortable accommodation Longer duration flight

America West Strategic Service Vision


Service

delivery system:

1)Well trained employee 2)SABRE booking 3)Boeing 787 4) Accommodation at layover

Operation strategy
Finance

: low cost flight HR : well trained professional and a creative and skilled management team. Marketing : geographical segmentation covering only SW part of America and especially targeting the frequent flyers like business travelers. Operations : aircraft Boeing 737, spacious waiting space.

Service concept
Supporting

1)
2) 1) 2)

facilities: The aircraft being used is Boeing 737. Waiting area is spacious. Facilitating Goods: Waiting area is spacious provided with comfortable seats and T.V. Monitors. Online reservation facility available

3) On board amenities : Journals like USA Today and Wall Street Journals are provided. For long duration flights uncooked snacks like sandwich, cheese, fruits and desert are provided. Explicit services : 1) Trained support personnel 2) Skilled and creative management team 3) More flights per day with less layover time

Implicit 1) 2)

Services : Services are personalized provided by well trained professionals. Accommodation area provide a feel at home feeling to its passengers.

Target

market :

1) 2)

Is small, basically targeting south west part of America. And especially targeting the frequent flyers like business travellers.

Answer 4

SWA AWA

Conclusion
Though

America West has managed to meet the Southwest Airline challenges by providing different extra facilities to their commuters but the Southwest Airline has set the Golden Standard for safety, efficiency and in terms of consumer satisfaction and SWA is still leading in pricing, on-time arrivals, and no-frills service.

Thank you