United Airlines Case Analysis BSAD 449 – Professor Muss May 9, 2006 by Renee Graham, Tamar Ferguson, Hope Halberg Jessica Powers, and Laura Rickard.

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Presentation transcript:

United Airlines Case Analysis BSAD 449 – Professor Muss May 9, 2006 by Renee Graham, Tamar Ferguson, Hope Halberg Jessica Powers, and Laura Rickard

Home Previous Next Help Summary Overview Introduction Industry Analysis Company Analysis Competition Problems Recommendations Conclusion

Home Previous Next Help General Environment and Trends Demographic Economic Political/Legal Sociocultural Technological Global

Home Previous Next Help General Environment and Trends Industry –Low-Margin –Capital-intensive Cost components –Labor –Fuel Costs Unions Price Competition

Home Previous Next Help General Environment and Trends Techonology- Internet Decrease of customer loyalty Global Trends Strategic alliance with Air Canada Star Alliance

Home Previous Next Help General Environment and Trends Sociocultural Trends- -September 11, United Airlines Response Political/ Legal Deregulation -Air Transportation Safety and System Stabilization Act -Emergency Aid Loans

Home Previous Next Help General Environment and Trends Opportunities for continued success

Home Previous Next Help The deregulation act of 1978 Market size The point-to-point system Hub-and-spoke system Alliances Rolling hub system

Home Previous Next Help PORTERS

Home Previous Next Help SWOT BREAKDOWNJET BLUEAMRUALSWESTDELTA PRICE GATE PERFORMANCE QUALITY RELAIBILITY MARKETING TOTAL

Home Previous Next Help SW UAL Cost to Consumers High Medium Low JetBlue Ryanair Lufthansa Japan DAL AMR High S E C U R I T Y Low CAL

Home Previous Next Help Tangible and Intangible Resources Value –Price Tangible Intangible Brand Loyalty Frequent Flyer

Home Previous Next Help Differentiation Market Share –Point-to-Point No Change Competition Strategy Delta

Home Previous Next Help UAL Financial Ratios United Airlines Financials Ratio ∆ '97 to ' ∆ '98 to ' ∆ '99 to ' ∆ '00 to '01 Gross profit margin43.5%43.9%0.4%47.3%3.4%42.4%-4.9%28.5%-13.9% Net profit margin5.5%4.7%-0.8%15.6%10.9%0.3%-10.6%-13.3%-2.7% Return on assets6.0%4.4%-1.6%13.4%9.0%0.2%-13.2%-8.5%-8.7% Return on equity38.9%20.5%-18.4%46.5%26.0%0.9%-4.5%-69.0%-23.4% Debt to assets81.3%77.9%-3.4%70.7%-7.2%76.3%5.6%87.7%11.4% Debt to equity527.1%361.0%-166.1%245.2%-115.8%322.8%77.6%710.2%387.4% LT debt to equity9.6%2.4%-7.2%1.5%-0.9%3.0%1.5%39.1%36.1% Cash ratio Quick ratio Inventory turnover Fixed asset turnover Total asset turnover Receivables turnover Avg.collec.period Payables turnover Days of cash

Home Previous Next Help UAL Expenses

Home Previous Next Help Industry Ratios

Home Previous Next Help Industry Ratios

Home Previous Next Help Selected Company Figures ($ in millions)CALAMRDALUSAirUAL Net Income-$95-$1,562-$1,216$1,989-$2,145 Net Sales$8,969$17,484$13,879$8,253$16,138 A/R$404$1,371$368$272$1,047 Cash$1,132$117$2,210$537$1,688

Home Previous Next Help Recommendations Liquidation –$72 Million Cut –$500 Million in Future –$572 Million in Cost Reduction Continue Strategies Changing System –American Airlines –Long-term Contracts

Home Previous Next Help Questions?