Song Case Study
1. Companies in today’s marketplace need to be able to adapt to an ever-changing business environment in order to survive. Companies can no longer afford to take the future for granted. This is especially true for the airline industry since September 11, 2001 and one thing has become evident: a company cannot afford to become complacent with its business model. Prior to September 11th, 2001 the business climate for the airline industry in the US was relatively healthy and optimistic. The discount airlines were thought to pose no eminent threat to the major carriers, but when those major carriers failed to account for unforeseen factors and underestimated the competition, the market began to look similar to the days when the US automakers failed to foresee the imminent threat the Japanese products represented. Events like September 11th created a change that left legacy companies like Delta airlines unable to compete. After September 11th, Delta initially had a stronger financial performance than most of its big carriers because of its less-unionized work force and more flexible operations. All U.S. airlines have suffered a substantially more difficult revenue environment since 2001, particularly in the domestic market. The pressure of high fuel costs prompted a series of changes in Delta’s business model to maintain a level of profitability, as pricing still remains far below pre-2001 levels. The introduction of Song airlines by Delta allowed them to compete with other low cost carriers. Song, the subsidiary of Delta Air Lines, offered state-of-the-art electronic entertainment systems, name brand food, above-average legroom and fares cheap enough to take on growing low-fare carriers like Southwest, Jet Blue and Air Tran.
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