Free The United Continental Holdings Inc Essay Sample
The best collaboration that ever occurred was with the two airlines that is Continental Airlines and United Airlines. These two formed a formidable United Continental Holdings Inc. to help serve their clients better, carry out their businesses with a strong frontier and to increase their profits that could give them the incentive to expand more. This too was done in order to bring more creative people to work within the company which required making the changes more effective in carrying their business agenda. With the air travel market expanding each day due to the effects of globalization, there is more to survival than waiting to get the business work on its own (Zachary, 2007).
The number of employees that the company has and their qualifications shows that there is commitment to ensure that its global outreach works to bring in the profits that are required. With over 80,000 employees globally, they stand a chance to give customers an experience of a lifetime. Moreover, the incentives that they offer their employees make them motivated to work better for the success of the company. The success has made them a competitive company in the industry as it is listed among the best performing in the NYSE. As its umbrella seeks to expand, it’s likely that it will have to follow more profitable stance with subsidiaries that structurally augment the existing franchise. Thus the purpose of this discussion shall be to evaluate the company’s performance in regard to market competition and sustainability (Ben, 2008).
Performance of United Continental Holdings Inc
The company houses two of the leading airline companies in the world hence making it quite profitable. On the sealing of the deal that brought the two companies together, there was still good performance with 45% going the Continental airline way while 55% was brought in by United Shareholders. Upon the formation of their merger, the two airlines came under the logo UAL thus forming the biggest commercial airline in operation to date through the number of clients that use it and the amount of air travel that it has covered (Zachary, 2007).
United Continental Holdings has its operations in most major cities in the United States. This means that it covers the Chicago, which is its home turf, Denver, Houston, Newark, Washington, Guam, Cleveland, San Francisco and Tokyo through Narita. The one where they operate in Tokyo through Narita gives it a right to own several air rights that give it a chance to operate among the few American airlines in Asia. This gives it the chance to operate in China as well as the rest of Asia where its services have high productivity (Ben, 2008).
The subsidiaries that United Continental Holdings owns are more inclined to the service industry hence making it possible to juggle between the functions that it has to fulfill. The main subsidiaries are; the Chelsea Food Services, UAL Loyalty Services Inc which operates several franchises in the marketing and branding fraternity, Continental Micronesia and United Worldwide Corporation. These subsidiaries and the airline itself give the company a chance to serve from 10 hubs and cover up to 370 destinations (Wesley, 2010). This has not stopped it from entering the Latin America territory which will probably carry its operations from their future biggest hub situated in George Bush international Airport. In fleet size, it has become the second largest after Delta with over 700 airplanes. Their airplanes are from reputable companies such as Airbus and Boeing hence making it more appealing to the clients who want to know the servicing and distributing company before they use any of their services (Ross, 2009).
Analysis of the Company through its Main Departments
The Marketing department holds the greatest responsibility of taking the Airline Company go to the next level. This starts with branding to promotion of the services that are offered and the quality with which the services are going to be offered. The significant step that has been taken is to have several hubs from where the airline operated from. This has ensured that the airline has a close relationship with customers from different sides of the country of operation as well as the rest of the world. Marketing if not done creatively can lead to negative response from customers leading to diminishing of its profits thus killing its capital geared for future aspirations (Zachary, 2007). Therefore, in marketing there has to be a consideration into all services that the airline offers. This includes the fares, the classes that are serviceable and holding rigorous advertisements whenever there are ground breaking introductions into the services that are being offered. On the part of fares the airline offers discounts which are done directly to avoid the expected exploitation from middle travel agents. The issue of fares being a customer incentive will go into making the airline more used thus bringing in more business to its subsidiary (Ben, 2008).
In its finance and economics segment, the airline holds the biggest account by judging through its subsidiaries and the number of operations that it holds throughout the world. Its passenger revenue generation has been on a constant upward trend as is reflected in its 2010 September release that shows a 3.4% increase. On the other hand, its load factor showed an increase of 25 points hence giving the company a refreshing stance in the market. In its quarterly analysis of the financial report its balance sheet stood at average of 5billion dollars thus making it the highest earning company that operates airlines (Wesley, 2010). On legal issues, there are a few hurdles that need to be covered before the company can continue with its future investments. This means that there is more in terms of mergers that need to come up hence the need to follow all regulations that govern the airline industry. Thus their main hurdle of merging has been put aside which means that reaping in the industry will at higher stakes. This has thus brought in the leading lawyer in the business with good skills in leadership and managing of assets to handle their legal issues and better still help in building an integrated company (Ross, 2009).
SWOT Analysis through its various Departments
The company has a wide range of services to offer that covers passengers, mail and cargo. The fact that it operates throughout the world places it strategically in a position to understand the world markets. It’s costing on fares is friendly and goes on to cover offers on discounts on the most loyal customers which means that they work hard to retain their customers. Moreover, its management team is the best in leadership as it combined the use of the two side’s employees before the merging. The innovativeness of its branding and marketing unit gives the airline a chance to appeal to customers who recognize as a reputable company and due to more profits generated through its subsidiaries; it has been possible to build a strong capital base (David, 2009).
The weaknesses that come out in the company are the preying ground for competitors and there have been several problems on this end. A major weakness has been the lack of a committed website which should act as a source of information for its customers especially those who cannot access their physical offices. The large number of employees has not helped as it spreads across continents hence making tracking them more difficult. This has thus brought in more cost in regard to spending on infrastructure which should aid in maintaining constant communication. Moreover, there has been a big capital outlay due to the expensive maintenance cost of the airlines which weakens the capital base (Ross, 2009).
The ever changing airline industry brings in more opportunities for expansion. This means that even if there are several airlines on the same route the innovations will still be high in terms of services offered. This offers a chance to divide the services offered as either business oriented or inclined to business as per the customer’s requirement. On the other hand investing in technology will give the company a chance to cut on costs (Ross, 2009). This includes having a committed online site that offered bookings and time of departures which can cut on operation costs. Furthermore, making more mergers will augment the passenger volume and still give a higher bargaining force when making more deals on expansion (David, 2009).
The global economic recession poses the greatest threat to air travel as it will kill people’s initiative to travel by air. This means that all activities that go with air travel such as tourism would have been discouraged due to the biting economy. A more recent threat to the survival of air travel has been in regard to terrorist activities which thus point to security within the aircraft and the airport. Finally, the stepping in of the government through its carriers has been a constant threat on the company’s survival as it tends to lower its prices and still manage to offer services almost at the same level (David, 2009).
Air travel should be the most guarded business that any company can start. This means that the more the reputation is built the more the customers build their confidence. The United Continental Holdings Inc. should be more aggressive in using the internet in making its services known through a wide range in all the continents and not restricting itself to a few areas. This being a lucrative business, losses should not be ruled out hence the need to build up enough capital when there is the high season to help in cushioning the effects of a recess. However, for a company that understands its role in the market there is more to building on customer incentives in order to maintain the already established base as well as attract more into their brood (David, 2009).