Synopsis of Key Issues Essays - Aviation, American Airlines Group

Synopsis of Key Issues The current owners should keep the business because they have the potential to be a leader in the market. Since they have been doing this for a long time, they are slightly old style, and in order to keep going, it sounds like they are going to have to be updated. During an update, they may be able to obtain new equipment that would be to their advantage over other companies. This is commonly seen in the large chain restaurants; one will make a large step toward a product or machine, which puts them ahead of the rest of the market. This airline could invest in new planes and new systems for various jobs to make it easier and eventually the investments will pay off. For the future of Mid-Continent they should sell their two oldest planes and buy two new Beechcraft 1900's. In addition they need to try and get the loans from the banks in the small towns that they work from to help them refurbish the planes they already own and to buy new ones. Mid-Continent can also make the best out their already owned planes by changing the areas that they fly to. For instance, they can fly to destinations that are closer from the airports they are departing from to help lower the mileage that the planes fly. Mid-Continent should be in Market D. this market is the best for them because they would travel less miles, which would help with their older planes that have trouble going the extra miles, and it would help them get more consumers as well. They would be near a university and many businesses which would bring their consumer intake up. With thirty-six people wanting seats each day they could fill up at least two planes a day in this market. The best plane for Mid-Continent to acquire would be the Beechcraft 1900. The Beechcraft is has the cheapest price and has the lowest quarterly lease. Purchasing this one would mean that they would be able to use any extra money to help them refurbish the planes that they already own and need to be fixed up. The Beechcraft also has better MPH than the British Aero 31 which is $200,000 more expensive than the Beechcraft and is only 4 MPH behind the Saab 340 which is $1.4 more expensive than the Beechcraft. There are critical issues that this company poses to any future venture. Airline's rapid growth in passenger numbers is a concern for the amount of planes they own. If the numbers keep increasing like the first year shows the airline will need massive amounts of funds for more planes and possibly terminals; if of course they choose to keep flying to unpopular destinations. In order to achieve and stay ahead of other airlines, if they continue to grow, they must update air crafts as well to meet the expectations of clients flying with them. This will also require more money on top of their present need for more planes. With newer technologies on planes maybe a possible decrease in the amount of fuel needed to fly could happen along with a cut in ticket prices making their airlines more attractive to potential flyers. If the airline is only flying to places that are avoided by most other airlines there could potentially be a shortage in flyers, once more planes are acquired there could be a spreading out of their clients, choosing a few major hubs to fly into to even out their revenue in times of shortages of passengers. Being a mom and pop business they may need help from an outside source for advice and other things of that nature. The major airlines have advisers helping them along the way to ensure their business has good standings. There are other things they will need to consider. Like setting themselves apart from other airlines, by offering things others do not, a free checked bag, etc. Some people would enjoy a first class experience, and are willing to pay for it, privacy could be another possible upgrade. Critical issues for this business are money and keeping up with the times.