Abstract
Purpose - The purpose of this paper is to analyze some of the issues US airlines are facing to control costs and improve operations.
Design/methodology/approach - A detailed comparison of two major airlines ( American Airlines and Southwest Airlines) is performed to identify key differences and to confirm the areas on which airlines need to focus improvement efforts. Cause and effect diagrams are used to identify the factors triggering the issues. Process analysis is also used to offer improvements to reduce costs and improve customer service. Analysis is based on publicly available airline and industry information.
Findings - Revenue, costs, growing economic concerns and an extremely competitive environment are the major areas on which airlines need to focus to be successful. Recommendations are offered in these areas. Owing to the impact of the internet and travel consolidators such as Expedia, revenue increases are challenging, but suggestions are tendered to improve this area.
Originality/value - The study may cause airline management to consider the operational improvement possibilities that are still available within their industry. Be they major network carriers or growing low cost carriers, potential opportunities are identified for improved operational profitability, while maintaining and enhancing customer service. The use of process analysis can provide insights into the inefficiencies which exist within current processes and place more emphasis on demand pull type processes which require forecasting operational schedules.