The airline industry value chain

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The airline industry value chain

These include the information strategy, the organizational strategy and the business strategy. The value chain is a brilliant strategy that incorporates all the three. The value chain is a set of activities that an organization in a specific industry uses to operate their businesses Grant, Every activity within an organization has to go through the value chain of the organization.

It is a concept of business that was brought up by Michael Porter in a book he wrote about creating and sustaining superior performance in an organization. The value chain framework by Michael Porter helps firms look at specific activities, which they can incorporate. This helps them create value and competitive advantage Porter, This framework involves certain standards, including the firm structure, human resource management, technology development and procurement.

The primary activities of this model include operations, outbound logistics as well as inbound logistics, service to customers and sales, and marketing. Inbound Logistics Inbound logistics concerns receiving goods, storage of goods, inventory control and scheduling of transportation Porter, In the airline industry, there are extremely many companies that come into play in order to make it a success.

These include aircraft manufacturers, food service companies, airports, local transportation service, fuel companies, aircraft leasing companies and labor unions. In case there is a breakdown in the accessibility, supply and storage of items from any of these above-mentioned companies, then there can be a break down in the airline industry.

Efficiency in all companies, which involves proper supply and storage around each other, ensures a sustainable airline industry that makes maximum profits. If the fuel companies are not able to get their fuel to the aircrafts on time, then it means that the aircrafts cannot operate.

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You can always hire our highly-qualified writers! Deal with best custom writing company online! Operations This has to do with everything that concerns equipment maintenance, assembly, packaging, testing and every other activity that transforms inputs to the end product Porter, These include maintenance of the aircraft and constant repair as well as replacement of the worn out parts.

There is a need for efficient operations in the airline industry. It should be efficient and technologically superior. Airlines employ specific companies that assemble their equipment and do follow up for purposes of maintenance.

These must be specialized companies to ensure efficiency and safety of the airlines. They must coordinate, control and manage their repair work all around the world. This should not only be for equipment, but also for airport services, the runway and the service training for workers.

This kind of management keeps the performance of the airline industry very high. These operations are mainly activities that prepare people for the transformation of the raw material into the final product. Outbound Logistics These are the activities that must be undertaken to enable the finished product to reach the customer Porter, For the airline industry, these include services such as making sure that those customers who order tickets on the phone or on the internet receive them, ensuring transport for customers who land at the airport to their homes, and distributing branches of the same airline evenly around the world so as to make life easier for customers.

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This also includes warehousing. Furthermore, it comprises receiving of goods or customers, inspection for the legitimacy of the goods and customers, verification, storing and retrieval of goods when needed in the future.Tuesday night, United’s management held an earnings call to discuss its earnings in the fourth quarter of The last time United’s CEO Oscar Munoz took the mike during an earnings call, the stock price tumbled 12%, erasing $ billion from the company’s market value.

The airline industry value chain

Turns out Tuesday’s call was followed by another drastic drop in stock price. Value Chain Profitability An analysis of the level of investor returns within the airline industry and its supply chain. IATA ECONOMICS BRIEFING No.

The airline industry value chain

The airline industry is a diverse sector, requiring the support of a varied range of ancillary businesses such as maintenance, catering and travel agencies to carry out its activities. British Airways value chain analysis involves the adoption of a systematic approach in the analysis of competitive advantage.

The framework makes a distinction between primary and support business activities identifies the sources of competitive advantage for each activity. The figure below. The Candidates. Narrowing down the candidates for this analysis was a critical first step in the process. To ensure it was always an apples-to-apples comparison, we chose to focus solely on US-based airlines with either a large domestic route network or partner carriers.

A frequent-flyer program (FFP) is a loyalty program offered by an airline.. Many airlines have frequent-flyer programs designed to encourage airline customers enrolled in the program to accumulate points (also called miles, kilometers, or segments) which may then be redeemed for air travel or other rewards.

Points earned under FFPs may be based on the class of fare, distance flown on that.

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