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Continental Airlines: The Competitive Arena. Banu Ozkaya Ben Harris James Babb. Outline. Most Direct Competitors Competitor Financial Situations Competitor Strategies Charts reflection industry Industry Trend Future of the Airline Companies. Who are the Competition? (Top 5) .

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continental airlines the competitive arena

Continental Airlines: The Competitive Arena

Banu Ozkaya

Ben Harris

James Babb

outline
Outline
  • Most Direct Competitors
  • Competitor Financial Situations
  • Competitor Strategies
  • Charts reflection industry
  • Industry Trend
  • Future of the Airline Companies
who are the competition top 5
Who are the Competition?(Top 5)
  • American Airlines
  • Delta Airlines
  • United Airlines
  • Airtran Airways
  • Southwest Airlines
american airlines 2005
American Airlines (2005)
  • Largest US Airline
  • Based in Forth Worth, Texas
  • Not in Chapter 11 Bankruptcy
  • Serves 150 destinations worldwide
  • International carrier operating 699 aircraft
  • Purchased TWA in April 2001
  • American Airlines’ CASM is 3% higher than Continental
  • Biggest Concern: Competing on price with reorganized airlines
american airlines financial data 2005
American Airlines Financial Data (2005)
  • ASM: 176.13 Billion Miles
  • RASM: 9.43¢
  • CASM: 10.50¢
  • Net Income: $(861,000,000.00)
  • Load Factor: 78.6%
  • BE Load Factor 85.5%
american airlines strategy
American AirlinesStrategy
  • Lower operating costs in order to compete with restructured airlines and low-cost carriers
  • Improve Hub-and-Spoke system to more efficiently serve larger markets
  • Utilize it’s American Eagle brand as a low-cost alternative carrier to compete with low fare airlines.

Source: American Airlines 2005 10-K

american airlines swot
American AirlinesSWOT

Source: http://web105.epnet.com

delta airlines 2005
Delta Airlines (2005)
  • Based in Atlanta, Georgia
  • Currently in Chapter 11 Bankruptcy
  • International carrier operating 649 aircraft
  • Serves 149 Cities Worldwide
  • Delta Airlines’ CASM is 14% higher than Continental
  • Biggest Concern: Competition from low-cost carriers and recently reorganized airlines

Source: Delta Airlines 2005 10-K

delta airlines financial data 2005
Delta Airlines Financial Data (2005)
  • ASM: 156.79 Billion Miles
  • RASM: 10.33¢
  • CASM: 11.60¢
  • Net Income: $(3,836,000,000)
  • Load Factor: 76.5%
  • BE Load Factor 86.9%

Source: Delta Airlines 2005 10-K

delta airlines strategy
Delta AirlinesStrategy
  • Strengthen their Domestic Hub and Spoke Network
  • Increase International Presence in Europe and Asia
  • Merge SONG (Delta’s low fare airline) into Delta and convert their planes to the class-system
  • Delta is seeking the higher end customers and adding better entertainment choices and more first-class seats.

Source: Delta Airlines 2005 10-k

delta airlines swot
Delta AirlinesSWOT

Source: http://web105.epnet.com

united airlines 2005
United Airlines (2005)
  • Based in Chicago, Illinois
  • Currently in Chapter 11 Bankruptcy
  • International carrier operating 460 aircraft
  • Serves 120 destinations worldwide
  • United Airlines’ CASM is 4% higher than Continental
  • Biggest Concern: Competition from low-cost carriers, Higher fuel costs, Terrorist attacks.
united airlines financial data 2005
United Airlines Financial Data (2005)
  • ASM: 140.3 Billion Miles
  • RASM: 9.20¢
  • CASM: 10.59¢
  • Net Income: $(182,290,000)
  • Load Factor: 81.4%
  • BE Load Factor 82.8%

Source: United Airlines 2005 10-K

united airlines strategy
United AirlinesStrategy
  • Appeal to high-end customers through the introduction of enhanced first-class service.
  • Appeal to low-fare flyers through TED, United’s low cost carrier
  • Utilize the popular United Mileage-Plus frequent flyer program to attract and retain high value customers
united airlines swot
United AirlinesSWOT

Source: http://web105.epnet.com

airtran airways 2005
Airtran Airways (2005)
  • Based in Orlando, Florida. Main Hub in Atlanta, GA
  • International carrier operating 105 aircraft
  • Serves 47 US destinations as well as flights to Freeport, Bahamas
  • Airtran Airways CASM is 9% lower than Continental
  • Airtran is one of only a handful US carriers that has managed to remain profitable
airtran airways financial data 2005
Airtran Airways Financial Data (2005)
  • ASM: 15.36 billion miles
  • RASM: 9.09¢
  • CASM: 9.35¢
  • Net Income: $1,722,000
  • Load Factor: 73.5%
  • BE Load Factor 73.4%

Source Airtran Airways 2005 10-K

airtran strategy
Airtran Strategy
  • Low Cost
  • Targets “value oriented” business and leisure travelers
  • Low-Cost, Self-service ticketing to lower operating expenses

Source: Airtran Holdings 2005 10-K

southwest airlines 2005
Southwest Airlines (2005)
  • Based in Dallas, Texas
  • Domestic carrier operating 445 aircraft
  • Serves 61 US destinations
  • Southwest Airlines CASM is the lowest in the competitive group.
  • Southwest Airlines RASM was the by-far the highest in the competitive group.
  • Southwest had the highest Net Profit of all US Domestic carriers for 2005.

Source: Southwest Airlines 2005 10-K filing

southwest airlines financial data 2005
Southwest Airlines Financial Data (2005)
  • ASM: 85.17 billion miles
  • RASM: 12.09¢
  • CASM: 8.09¢
  • Net Income: $548,000,000
  • Load Factor: 70.7%
  • BE Load Factor 55.5%*
  • Highest Revenue per Available Seat Mile from Competitive Group
  • Lowest Cost per Available Seat Mile from Competitive Group
  • Highest Profit from Competitive Group

2005 BE factor unavailable. 55.5% from 2001.

Source: Southwest Airlines 2005 10-K filing

southwest strategy
Southwest Strategy
  • Short-Haul
  • Point-to-Point (Rather than traditional Hub-to-Hub)
  • Low Fare
  • Low Operating Cost
  • Services smaller, secondary airports
  • Single aircraft type allows for lower maintenance costs

Source: Southwest Airlines 2005 10-K filing

southwest airlines swot
Southwest AirlinesSWOT

Source: http://web105.epnet.com

continental airlines swot
Continental AirlinesSWOT

Source: http://web105.epnet.com

industry trend
Industry Trend
  • Brand loyalty is decreasing
  • Trend  low-fare service
slide33

References

Continental Airlines. (2004). Company Profile. Retrieved from

http://www.datamonitor.com

American Airlines. (2004). Company Profile. Retrieved from

http://www.datamonitor.com

United Airlines. (2004). Company Profile. Retrieved from

http://www.datamonitor.com

Delta Airlines. (2004). Company Profile. Retrieved from

http://www.datamonitor.com

Airtran Airways. (2004). Company Profile. Retrieved from

http://www.datamonitor.com

Southwest Airlines. (2004). Company Profile. Retrieved from

http://www.datamonitor.com