Northeasten Airlines
Introduction:
Northeastern is a small territorial carrier serving nine urban cities in the New England
states and the urban communities in the New York, New Jersey and Pennsylvania. Although
Direct flights are available for most of the routes between these cities but most of the times
connecting flights are required because of fuel consumption, Pilot rest etc. In order to provide
continuous flight services between these nine destinations Northeastern Airlines operates a fleet
of sixteen Embraer E-195 jets. It is the biggest flying machine in the Embraer E-Jet family. It is a
broadened adaptation of the Embraer E-190 airplane. It is a regional jet serving short haul
destinations having passenger capacity of 122 each.
These planes(E-195), which were initially introduced by Embraer in late 2004, have
helped northeastern carriers to stay beneficial for number of years. However the overall revenue
has been falling and northeastern is facing the possibility of cutting back their operations. The
falling of revenue can be estimated from the fact that the flights from Boston to Providence
Rhode Island and from Providence to Boston only produced profit of $9 per passenger which is
way too less. Administration at Northeastern aircrafts has considered a few choices to reduce
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cost and increment productivity because of Federal Aviation Administration directions, the
organization must continue to serve nine urban Cities. This indicates that Northeastern should
upgrade their strategy if they want to survive. If they don’t pay attention to this matter then in
future any one of their competitors will certainly knock the company out of their business which
already is in jeopardy.
Analysis:
SWOT Analysis:
Northeastern has many strengths but lots of weaknesses and threats which it needs to
overcome and use the opportunities which are available to make itself a strong profitable airline
which it used to be. Profitability of an individual company is mainly dependent on its efficiency
of operations. In case of Northeastern Airlines, the company needs to develop its operational
plan in such a way that it boosts the earned value over each passenger. (Watanabe 2010,
Johnston 1973)
Strengths:
Northeastern Airlines enjoys a good place in the New England market as compared to the
other carriers of this region flying on the same routes. It maintains an excellent cost based
advantage over other airlines having same flight routes because of its straight forward techniques
of high proficiency – excellent framework of online reservation system, low pricing and
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committed representatives. Company’s promotional techniques have enabled the organization to
stay beneficial for a long period of time.
The carrier utilizes the E-195 for all of its flights making it easier to maintain the fleet.
Mechanics need to know just the single sort of plane so the company has to employ less
engineers and mechanics and it just need to have single parts stock. Northeastern has routes over
small underserved destinations so it avoids competition with bigger airlines. These smaller hubs
make it feasible to operate its flights on time. The courses are normally short sections making in-
flight dinners pointless. The airline uses small planes so their per hour fuel consumption is also
very less as compared to the consumption of large planes. (Watanabe 2010, Johnston 1973)
Weaknesses:
The quality of Northeastern is extremely obvious in its reputation however it is not without
shortcoming. The portion of the facilities the organization offers are not appealing to everyone
such as No premium or discount seats. Lack of international flights decreases its customers.
From company’s financial point of view, current flight plan earns very less profit per passenger
for company so it needs to review its plan. (Peteraf 1994, Lerrthaitrakul 2014)
Opportunities:
If the company changes its routing strategies it has the potential of becoming a significant
profitable airline. By decreasing non-stop flights which would imply that a city served by
northeastern may just have non-stop flight to just a single other city. It can also take advantage of
travel websites such as Expedia for the booking of the flights by the passengers the cost would
be somewhat higher however it would enable potential clients to see its low costs one next to the
other with those of its rivals. Northeastern could make vital organizations with stimulation
organizations to give some kind of in-flight entertainment at low, or no-cost. An association with
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Sirius Satellite TV for example may allure a few clients to buy tickets on Northeast. \In addition
to that Northeast could offer courses in regions it doesn’t directly serve. (Johnston 1973, Render
2015)
Threats:
North east is not impenetrable to dangers like its competitors. One of the biggest dangers to
the organization would be that another contender can demonstrate itself after Northeast on both
price and cost. The organization could be effected badly by the rising gas costs. Additionally, a
sharp increment in travelers (supply) could influence the organization’s notoriety on the off
chance that it was not ready to take care of the demand. (Peteraf 1994, Lerrthaitrakul 2014)
Solution:
One proposal has been made to give less non-stop flights. It would mean that the city served
by Northeastern may just have non-stop flight to another city. The organization arrangements to
employ a marketing analysis to decide how request would be affected by longer flights with
more associations, and to foresee the demand along each of the route in light of changed flight
operation path.
Existing Route plan:
Following is the route plan which Northeastern airline is flying and due to this route plan
company is not gaining the profit that it should be. The falling of revenue can be estimated from
the fact that the flights from Boston to Providence Rhode Island and from Providence to Boston
only produced profit of $9 per passenger which is way too less. Overall operation is not earning
revenue what the company is expecting and the company is not getting the estimated MARR
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which it should be gaining with the operation capabilities its fleets have. (Bakken 1992,
Lerrthaitrakul 2014)
Proposed Solution:
Due to the cutback in the profits caused by the route plan at Northeastern aircrafts, few
changes have been considered. First of all we have to diminish cost and increment productivity
because of
Federal
