Southwest

Changes in court and efficiency The situation today in the airline business industry is basically a price/cost war. Companies atomic number 18 battling to cut and keep their operating cost low in cabaret to remain competitive in an industry that is potently driven by price. The principal cost meanss that drive the industry argon campaign and fuel. In terms of moil Neeleman, Jetblues CEO, verbalize that The biggest problem in the industry isnt pay, its work rules. Labor cost accounts for the 38% of the overall operating cost of an airline comp either. Depending on the system that a company uses, its dig up cost and labor necessity will vary. The point-to-point systems requires less personnel and the aircraft is less while on the ground, and more in the air, being able to career more times that those aircraft flying under the hub-and-spoke system. The introductory system is widely used by the new cheap carriers, while the hub-and-spoke is very typical of the traditional airlines (Appendix 1). Moreover, labor cost is rising, which increases the overall cost per seat (Wright, September 8, 2003). In terms of labor efficiency, low-cost carriers are reducing labor or either by e-ticketing or by doing what southwestward states on their contracts, any qualified employee can perform any function (load, unload, cleaning, etc) as needed (Thompson.

2005). The second, most important factor that determines the cost structure in the industry is fuel cost. It is tell that for one-dollar increase in the price of a fuel barrel, is be the industry a billion a year (Tang, C. April 11, 2005). Moreover, in the future, the price of fuel is expected to continue increasing, what will slenderize even more profit margins. What other companies have through with(p) to lower their cost is to eliminate meals. Instead, in short flights, snacks are served to the passengers, and in long-distance ones, costumers are allowed to bring food with them or buy it on board. From the efficiency point of view, it has been proven by low-cost carriers... If you want to get a full essay, order it on our website: Ordercustompaper.com

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