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AIRTRAN: Competitive Trend Analysis BY: Candace Eldridge, Damian Pryor and E. Summer Banks.

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Presentation on theme: "AIRTRAN: Competitive Trend Analysis BY: Candace Eldridge, Damian Pryor and E. Summer Banks."— Presentation transcript:

1 AIRTRAN: Competitive Trend Analysis BY: Candace Eldridge, Damian Pryor and E. Summer Banks

2 Southwest Airlines The Mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. (Source 1)

3 SWA Product Transportation –Boeing Jet 737 – 451 aircrafts –Frequent and timed flights –Point – to – Point verse Hub – to – Spoke service –Seventy – nine percent non-stop flights Shipping (Source 1)

4 SWA Place Southwest flies to 62 cities in 32 states. Founded in Texas Dallas, Houston, San Antonio (Source 1)

5 SWA Place (cont.) - Other Cities Served by Southwest (Source 1) AlbanyHouston (Hobby)Orlando AlbuquerqueIndianapolisPhiladelphia AmarilloLong Island/IslipPhoenix AustinJacksonPittsburgh Baltimore/WashingtonJacksonvillePortland BirminghamKansas CityProvidence BoiseLas VegasRaleigh-Durham BuffaloLittle RockReno BurbankLos Angeles (LAX)Sacramento Chicago (Midway)LouisvilleSt. Louis ClevelandLubbockSalt Lake City ColumbusManchesterSan Antonio Corpus ChristiMidland/OdessaSan Diego Dallas (Love Field)NashvilleSan Jose DenverNew OrleansSeattle/Tacoma Detroit (Metro)NorfolkSpokane El PasoOaklandTampa Ft. Lauderdale/HollywoodOklahoma CityTucson Ft. Myers/NaplesOmahaTulsa Harlingen/South Padre IslandOntarioWest Palm Beach Hartford/SpringfieldOrange County

6 SWA Promotion Southwest.com Commercials Advertisements (Source 1)

7 SWA – Price Low-cost, low-fare strategy Cost per Available Seat Mile Quarter 4 of 2004 – 8.18 Quarter 4 of 2005 – 8.42 Revenue per Available Seat Mile Quarter 4 of 2004 – 7.59 Quarter 4 of 2005 – 9.14 (Source 2)

8 Delta Airlines Vision We want Delta to be the Worldwide Airline Of Choice -Worldwide… access to the world with the highest standard for customer service - Airline…staying in the business we know best, air transportation -Of Choice …passengers, provide the best service and value. personnel, recognizes and appreciates contributions. Shareholders, earn a consistent, superior financial return (Source 3)

9 Delta Product Transportation Delta is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 492 destinations in 89 countries on Delta, Song®, Delta Shuttle®, the Delta Connection® carriers, and it's worldwide partners. Founded in 1928 in Monroe, LA Now headquartered in Atlanta, GA (Source 4)

10 Delta Promotion Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services SkyTeam Alliance: AeroMexico Air France Alitalia Continental Airlines CSA Czech Airlines KLM Royal Dutch Airlines Korean Air Northwest Airlines (Source 5)

11 SimpliFares Deltas ticket pricing is simplified Some flight restrictions removed (ex: Saturday night stays) Some fares reduced (Source 6)

12 Cost per Available Seat Mile Quarter 3 of 2005 – 13.7 Revenue per Available Seat Mile Quarter 3 of 2005 – 10.6 (Source 7)

13 AirTran Mission Statement Innovative people dedicated to delivering the best flying experience to smart travelers. Every day. Our Guiding Principles: We celebrate bringing people together through: Safety Taking personal responsibility for the safety of each traveler and every Crew Member. Courtesy Showing respect and providing caring customer service to travelers and Crew Members. Pride In our work, in one another and in contributing to the success of our airline. Teamwork Supporting one another and valuing our diverse contributions to meet every traveler's needs. Innovation Acting with an empowered "can do" spirit to continuously improve our airline. (Source 8)

14 Company Information from A1 Operates over 600 flights a day Market Consists of 49 cities currently (Source 10) More than 6,700 employees Airline hub is Atlantas Hartsfield Second largest carrier Worlds largest operator of the Boeing 717 Operates Americas youngest all-Boeing fleet Recently added Boeing aircraft (Source 9 )

15 Major Products and Services AirTran provides low fare domestic air transport services across the US primarily focused in the East. The company offers the following services: Short haul flights Connecting services (Source 11)

16 (Source 10)

17 Future Outlook (Source 10)

18 Recent Promotions Has added all Coca-Cola products including the Coca- Cola with Lime and New Black Cherry Vanilla Coke Held a promotional with Wendys to redeem coupons for one way tickets AirTran offered low one way flights between Minneapolis/St. Paul to Chicago for seven major shopping days this past Christmas season Re-launching X-Fares which is a standby program for year olds (Source 12-15)

19 DEFINITIONS: Cost Per Available Seat Mile (CASM) – The cost to operate each seat mile which is found by dividing operating cost by Available Seat Miles. Revenue Per Available Seat Mile (RASM) – The Revenue received for each seat mile offered which is determined by dividing operating income by Available Seat Miles. (Source 16)

20 Unit Revenue Network Rank Group 2003 Operating Revenue $(Millions) rd Quarter Operating Revenue $(Millions) rd Quarter Operating Revenue $(Millions) 1US Airways $1,458.12,038.62, Delta 2,938.41,444.31, Northwest 1,602.83,061.71, United 2,593.72,824.13, American 3, , Alaska , Continental 1,253.32,990.83,404.3 Group Total $13, , ,980.4 This is the domestic Operating Revenue per Available Seat Mile (Source )

21 Unit Revenue Low Cost Rank Group 2003 Operating Revenue $(Millions) rd Quarter Operating Revenue $(Millions) rd Quarter Operating Revenue $(Millions) 1Frontier$ AirTran237.31, Southwest1, America West , Spirit Jet Blue ATA Group Total$3,196.23,445.84,216.4 (Source 17-19)

22 Unit Revenue (Source 17-19)

23 Unit Cost Network Rank Group 2003 Operating Expenses $(Millions) rd Quarter Operating Expenses $(Millions) rd Quarter Operating Expenses $(Millions) 1US Airways-$1,541.11,650.42, Delta-3,113.53,460.71, United-2,592.62,005.22, American-3,300.83,040.53, Northwest-1,516.01,395.83, Continental-1,306.93,235.63, Alaska Group Total-$13, , ,691.7 Operating Expenses Per Available Seat Mile in Cents (Source 17-19)

24 Unit Cost Low Cost Rank Group 2003 Operating Expenses $(Millions) rd Quarter Operating Expenses $(Millions) rd Quarter Operating Expenses $(Millions) 1Frontier-$ AirTran America West Spirit Southwest-1,368.11, ATA , Jet Blue Group Total-2,837.93,321.84,127.4 (Source 17-19)

25 Unit Cost (Source 17-19)

26 QUESTIONS… ?????????????

27 Bibliography Source 1 -Southwest Airlines. Source 2 -Security and Exchange Commission: Southwest Airlines Co. Form 10-K 0vk.htm#001 Source 3 - t#328,19,Delta Airlines Vision Source Source 5 - x.jsp Source _2351_pi036.htm Source 7 - Source 8 - Source 9 – From Team A1 Source 10 - Citigroup 2006 Small & Mid-Cap Conference PresentationCitigroup 2006 Small & Mid-Cap Conference Presentation Source 11 - Datamonitor Company Profiles Authority

28 Bibliography Continued… Source 12 - AirTran Airways Is First Airline to Board Black Cherry Vanilla Coke(TM) Website: 1&company_mer=80077&Type=news&Area=Recent&StoryId= PR_NEWS_U SPR_____NYW157 1&company_mer=80077&Type=news&Area=Recent&StoryId= PR_NEWS_U SPR_____NYW157 Source 13 - AirTran Airways Welcomes X-Fare Travelers in 2006Website: 1&company_mer=80077&Type=news&Area=Recent&StoryId= PR_NEWS_U SPR_____NYTH040 1&company_mer=80077&Type=news&Area=Recent&StoryId= PR_NEWS_U SPR_____NYTH040 Source 14- Wendy's air fare deal promotion called "a great seller." : 1&company_mer=80077&Type=news&Area=Recent&StoryId= KRTRIB__BU SNEWS_27423 Source 15 - Not Finding the Perfect Gift? AirTran Airways to Offer One-Day Shopping Getaways at Mall of America(R) or the Magnificent Mile: 1&company_mer=80077&Type=news&Area=Recent&StoryId= PR_NEWS_U SPR_____NYF059 Source Source 17 - Third Quarter 2005 Airline Financial Data: Regional Passenger Airlines and Low- Cost Airlines Report Domestic Profit; Network Carriers Report Smaller Loss Source 18- Third Quarter 2004 Airline Financial Data: Regional Passenger Airlines Report Highest Rate of Domestic Profit Source 19 - BTS Releases Third Quarter 2003 Airline Financial Data; Regional Passenger Airlines Report Highest Rate of Domestic Profit


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