Topic > AirTran Airways - 1563

Mission: Innovative people dedicated to providing the best flight experience to smart travelers. Everyday. Suggested Mission Statement: Innovative, vital, rugged, customer-focused company committed to serving smart travelers. Every day.Case Statement:Our mission is to maintain our profitability despite increasing competition and fuel costs.Background:"AirTran Airways, a subsidiary of AirTran Holdings (NYSE: AAI), is a low-cost airline cost designed for business travelers, offers Business Class, new aircraft with XM satellite radio and EasyFit overhead bins, assigned seats and our accommodating A+ Rewards frequent flyer program, with an excellent customer service and one of the youngest all-Boeing fleets in the world, has continued to impress audiences." (www.airtran.com) Internal factor evaluation matrix Weighted score for weight evaluation Strengths1. Remaining Profitable .18 4 .722. High quality of service .14 4 .563. Using the elevated floor .11 4 .444. Large airport presence .07 3 .215. Young airline fleet .03 3 .09Weaknesses1. High operating cost for ASM .18 1 .182. Concentrated in the eastern United States .10 2 .204. Low ratings in selected AQR categories .04 2 .085. Heavily dependent on fuel .06 2 .12Strengths• AirTran must remain profitable, both to survive but, more importantly, to maintain investor interest and confidence.• High service quality is critical for AirTran to maintain a healthy base of repeat customers.• Particularly important in AirTran's low-cost strategy of using aircraft to their full potential is critical. • AirTran has a large airport presence throughout the eastern United States. • AirTran benefits from a young aircraft fleet through cost savings, quality and marketing efforts. Weaknesses • One of AirTran's major weaknesses is its high operating cost per available seat mile compared to other low-cost providers such as Southwest and JetBlue. • Due to increased competition, especially Southwest, AirTran is only available primarily in the eastern United States. Customers needing to travel within the Western United States will likely choose another airline which may build brand loyalty to another airline. • Although AirTran received a high ranking in the Airline Quality Rating (AQR), there are still areas where AirTran lags, such as on-time performance and denied boarding performance. • Although primarily outside AirTran's control, their revenues and costs are highly associated with the cost of fuel. AirTran is doing well overall relative to its internal strengths and weaknesses. Key areas for improvement are high operating cost per available seat mile (ASM), domestic and domestic attendance, and other minor areas. External Factors Evaluation Matrix Weighted Opportunity Weight Evaluation Score1. Decrease operating costs for ASM .18 2 .362. Increase US presence .15 3 .453. Increase international presence .11 1 .114. Increase Select AQR rating .05 2 .105. Adding consumer technologies to the fleet .03 2 .06Threats1. Greater competition .2 3 .62. High fuel costs .14 3 .423. Increase in labor costs .06 2 .124. Political policies .04 4 .165. Strikes .04 4 .161.00 2.54ExplanationsOpportunities1. One of the main opportunities for AirTran to dramatically increase revenue would be to reduce operating costs per available seat mile (ASM).