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Airlines Industry

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by

Thanh Tang

on 27 February 2013

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Transcript of Airlines Industry

Lansing Marriott
International Inc. Started in 1927 as a Root Beer stand Grew to a multi-billion dollar company with over 3800 properties worldwide Over 120,000 full time employees
Hotels in 74 countries
19 different Hotel Brands (Ritz-Carlton, Renaissance, Residence Inn, Various Marriott brands) Top Competitors Opportunities Comparative
Advantages Weaknesses Expanding into growing markets
3219 Hotels in U.S. (~1.7% GDP growth)
63 Hotels in China (~9.3% GDP growth)
22 Hotels in India (~6.9% GDP growth)
Smart Visas Acquisition of thriving brands
Gaylord Hotels Acquired Oct. 1, 2012 for $210 million Marriott Financials Hilton Worldwide
540 properties worldwide
Moderate NA/European presence
Starwood Hotels
1,134 properties worldwide
Strong African/Asian presence
Accor Hotels
3400+ properties worldwide
Very strong European/global presence Delta Airlines Founded in 1928
Headquarter in Atlanta, GA
Major U.S airline
80,000 employees worldwide
700-plus aircrafts 350 destinations
Services approximately 160 million customers each year
Many airline mergers Competition American
United
US Airways
Southwest
Jet Blue Financial Analysis Passenger revenue increased 7%, or $560 million, compared to the prior year period. Passenger unit revenue (PRASM) increased 8.5%, driven by a 6.8% improvement in yield.
Cargo revenue decreased 1%, or $2 million, with lower cargo yields partially offset by higher volumes.
Other revenue increased 2%, or $21 million, from higher ancillary business revenue. Business Strategies (1) Delta Airline filed Chapter 11 in Sept 2005
NWA Merger Business Strategies (2) Fuel Hedging (Purchase refinery) Strengths World largest mega carrier
Innovative business strategies
Acquisition of Northwest Airlines
Sky Team alliance Market Forces Strong Competition
Slow Industry growth
Weak North American outlook THE AIRLINE INDUSTRY Delta Airlines
American Airlines
Boeing
Cessna
Marriott Textron Inc. Cessna Caravan Turboprop

Citation Business Jets

Single Engine Piston Aircraft Founding in 1927 Delivered more than 193,000 aircraft

Registered in more than 90 countries

Largest business jet fleet in the world 2008 Economic Downturn Lack of demand & investment

Loss $29 million in 2013 - poorest performance

Recover in the end of 2012

Cessna’s Caravan airplanes target to China’ market Textron’s Strengths Diversified product portfolio and balanced revenue streams

Strong research and development capabilities

Strong financial performance Textron’s Weaknesses Unfunded employee pension benefits

Heavy dependence on the US Textron’s Opportunities

Surge in defense spending in China and India Textron’s Threats Intense competition Andre Customer Service
System-wide Reservation Centers
Strong Online/Mobile presence
Marriott Rewards
Green Hotel Prototypes The History of Boeing Started by William Boeing in 1916
incorporated in 1916 as Pacific Aero Products Co. June 29 1918 Boeing signs first Navy contract
Boeing and Hubbard fly the first US Canada mail run
Air mail act of 1934
Boeing and McDonnell Douglas Merge
787 dubbed the "Dream Liner" Economy
Consumer needs
Labor
Fuel
Competition
Environment
Technological change STRENGTHS Lean manufacturing practices established by Toyota
Benefits of Lean Manufacturing
737 ramps up production
Super Hornet reduces defects
Alabama plant decreases needed space Intelectual Property patents considered "Company Gold" COMPETITORS Based out of France, is a subsidiary of EADS
In Duopoly with Boeing in the Commercial Airline production market
Number one producer of commercial airplanes
Has used technology and innovation to establish its market leading line of planes Based out of Maryland
Works with US government and DoD
Global defense and security leader
Able to adapt to slowing economy with security service contracts WEAKNESSES Recent Battery issues
Constant Dream Liner delays
Internal conflicts
increased outsourcing Leads to production timeline issues
Return on investment timeline not profitable forcasts call for increased sales
Industry leading technology
the "plastic plane" Opportunities: Invest in new technologies
Fuel alternative
Enhance the customer experience Anthony Thanh Randy American Airlines A 1927 FC-2W, the oldest American Airlines plane to ever fly. Boeing 777-200ER landing at London Heathrow Airport Strategy Bankruptcy filing in November 2011 Financial Analysis Merger DC-3 "Flagship", American's chief aircraft type during the World War II period. American Airlines HQ in Forth Worth, Texas According to Fortune, 28% of American’s Revenue is labor cost. Compare at 20% at United; 18% at Delta; 17%, US Airways. American spends $600 million more on wages than its peers. Past Airlines Bankruptcy Went Bankrupt Exit Bankruptcy 2002 2003 2004 2005 2002 2006 2005 2007 Post AMR- US Airways Merger Operations Revenue Profit Margin Operating Profit against others Business Strategy (3) Merge allows delta to enforce Capacity & Jobs Cutting to increase competition. Things went back in 2008 Bell Helicopter
Cessna Aircraft
E-Z-GO
Greenlee
Jacobsen
Kautex
Textron Financial
Textron Systems
Full transcript