Airline Industry and American Airlines Term Paper

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Neither United Airlines nor Delta Airlines has been able to generate substantial cost savings in terms of fuel, albeit for circumstances beyond their control.

Continental Airlines

In contrast to the other airlines, "Houston-based Continental Airlines Inc., the fourth-largest airline in the U.S., has actually invested in customer-service improvements, increased its routes, and kept prices steady, all while managing to lose the least money last year," an impressive statistic when one considers that while Continental lost $68 million in 2005, Delta lot $3.8 billion. Continental has deployed a unique strategy of emphasizing one core competency. It was unable to slash fares drastically because higher fuel and labor costs, and it could not compete with the prices of value carriers, so it instead identified Continental's most valuable customers and offered them unique customer services such as automated tools and greater efficiency. Technology is its emphasis in customer service

D'Agostino 2006:1).

For example "if an airplane is more than 90 minutes late, we'll send an automated e-mail to our top customers on that flight apologizing for the delay," says Mike Gorman, senior director of customer relations.

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...Our best customers get rewards, like frequent-flier miles, for that inconvenience'...[and] the people who get those e-mails increase their business with Continental by 8%, a significant figure when you consider that those customers pay top dollar for their fares"

D'Agostino 2006:3). Continental is also one of the few airlines to serve meals on every flight, and it expanded its routes last year to compete with the more limited routes of value carriers

D'Agostino 2006:2). "Company executives knew that the fickle, low-cost consumer would never be their bread and butter -- they tend to jump from carrier to find the cheapest fare" so the company decided to concentrate on attracting a loyal group of frequent fliers who would be willing to pay more for superior customer service

D'Agostino 2006:2). It obeyed its mantra to 'Work Hard, Fly Right, as even the company's internal slogan reflects its stress upon high-end business travelers

D'Agostino 2006:2).

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