The Battle for Logan Airport American Airlines vs JetBlue Case Study Solution

Executive Summary:

The demand for the air travel is increasing day by day, the main reason for this drastic increase is the quality, speed and timing of travelling by air. The increased commercial and economic activities and spending vacations in abroad are also one of the key reason which are responsible for increasing the air travel. As the demand for air traveling is increasing the number of airlines are also increasing, the higher number of customers leads to high competition in the market. Several LCC service providershavealso emerged in recent times due to this high demand for traveling which is threatening the business of large expensive service providers.

As per the recent research, LCC will get 40% share from the market. American Airline also faces this threat because JetBlue an experienced LCC service provider is launching its services in Boston from where American Airline gets healthy proportion of their revenues. It can be considered necessary for Airline to respond to the entry of JB in order to sustain the competitive advantage from the Boston market. In addition to this, the management have considered various factors such as resources, competencies and time prior to construct the course of action. It is highly recommended that the management of AmericanAirline should have to immediately consider launching of LCC services in order to remain ahead from its main competitors.

Question 1: What should Joe Smith do? Should AA respond to JB’s entry into Logan Airport? Why or why not?

It can be said that it is very important for Joe Smith and American Airlines to react to the entry of JetBlue in Logan, the airline market of Boston is very critical for American as they derive healthy revenue figures from the market. Furthermore, the AmericanAirlines have long-standing history in operating at Logan, failure to react to the entry of JB in Logan can drastically affect the reputation of AmericanAirlines and its senior management. Joe Smith should have to adequately respond to this potential entry of JB, the adequate response can include running effective marketing campaign and launching the low-cost-carrier service in the Boston market.

The Battle for Logan Airport American Airlines vs JetBlue Harvard Case Solution & Analysis

Failure to respond to the entry of JB can have very adverse consequences on the financial and operational performance of AmericanAirlines, significant market share, revenues and profitability of the company will be on stake if AmericanAirlines fails to respond to the entry of JB. JB can take substantial customer base of AmericanAirlines by offering LCC services which can be very dangerous for the AmericanAirlines, moreover share of further markets could also be lost because of the increased competition from LCC service provider. AmericanAirlines should enter into the LCC segment in order to compete with the JB in Boston market, it can be said that this will increase the revenues of AmericanAirlines as the LCC have greater demand then the traditional airline services. In addition to this, AmericanAirlines should also have to run marketing campaign which aims to communicate the importance of success of American Airline to the local economy of the region and potential hazards of LCC services..................

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