Continental Airlines Analysis
ISSUES - September 11th impact: Continental lost millions in the days and weeks following the terrorist attacks. ... Continental was forced to make layoffs and temporarily ground planes. Gordon Bethune announced that close to 20 percent of Continental’s long-term flight schedule would be reduced. - Should Continental Cut More Flights? Bethune already made flight cutbacks and grounded certain planes, but perhaps he should make additional cuts until Continental sees some profitability. ... Continental needs to look at how they do business and try to find ways to cut costs and get through this rocky time. - Executive Changes: Greg Brenneman recently announced that he was resigning as Continental’s president and Chief Operating Officer. Brenneman played a key role in helping Bethune turn around Continental in the 1990’s. - Maintaining current success and future success: Up until 2001, Continental had experienced a lot of recent success. ... Once the economy picks up again, Continental needs to be able to maintain the success that they’ve recently had. ... Can other airlines copy the techniques that Continental used to get to where they are, or does Continental have something unique? - The alliance with Northwest Airlines: Continental needs to get their technologies aligned with Northwest’s in order to reap the benefits of the alliance. The code sharing idea is expected to produce an increase in $265 million in operating income for Continental. Also, Continental should consider entering into similar agreements with other airlines. ... If Continental does offer flights at these airports, they can look at opportunities to reach a code sharing agreement with other airlines like United, American, etc. ANALYSIS 5 Forces Model: Unit of Analysis = airline industry throughout the world because Continental offers flights across many countries, not just the US. ... Airlines are all competing for basically the same type of customers. There are many large players around the world, especially in the US where Continental does most of its business. These airlines have a lot of the same goals and use some of the same methods to achieve these goals. Customers usually are willing to switch airlines if they can find a cheaper price with comparable quality.