The International Air Transport Association (IATA) reports statistics on the number of passengers carried each year by major airlines. Passenger data for 2006 are reported for the top 10 fliers in three categories:

• Domestic flights

• International flights

• Combined traffic, domestic and international flights

The following table lists both passenger data and rankings for each category.

For this exercise, you will develop competitor profiles of selected air carriers.

Part One

Working in groups of 5–7 people, each team member selects one airline from the table. The pool of selected airlines should contain a roughly even balance of three regions: North America, Europe/ Middle East, and Asia. Using outside resources, answer the following questions:

• What drives this competitor (i.e., what are its objectives)?

• What is its current strategy?

• What does this competitor believe about its industry?

• What are its strengths and weaknesses?

When researching your companies, you should use multiple resources. The company’s Web site is a good starting point. Public firms headquartered in the United States will also have annual reports and 10-K reports filed with the Securities and Exchange Commission.

Part Two

As a group, summarize the results of each competitor profile into a single table. Then, discuss the following topics:

• Which airlines in your group had the most similar strategies? The most different? Would you consider any of the firms you studied to be in the same strategic group (i.e., a group of firms that follow similar strategies along similar dimensions)?

• Create a composite 5 forces model based on the firms you reviewed. How might these elements of industry structure (e.g., substitutes, or bargaining power of buyers) differ from the perspective of individual airlines?

• How well do the strategies of these airlines fit with their industry and general environments? Which airlines do you expect to advance in passenger rankings, and which will lose ground?

Transcribed Image Text:

Airline Air France All Nippon Airlines American Airlines British Airways Cathay Pacific China Southern Airlines Continental Airlines Delta Airlines Easyjet Emirates Japan Airlines Int'l KLM Int'l Ranking 3 7 4 10 6 9 5 LO Int'l Passengers 30,417 21,228 29,498 16667 21,917 16,748 22,322 Domestic Ranking 6 2 7 9 3 8 Domestic Passengers 45,328 78,607 45,249 35,852 63,446 37,154 Combined Ranking 7 8 1 10 3 9 Combined Passengers 49,411 49,226 99,835 48,512 73,584 48,911