briefly research this purchase announcement choose a side and make your best case for one of the following

United Airlines released its’ financial results for 2015 on January 21, 2016. In their press release United also announced the purchase of 40 new Boeing 737-700 aircraft to replace a number of their 50-seat regional aircraft. A portion of the press release states:

“Today, UAL announced it would take delivery of 40 new Boeing 737-700 aircraft, which will enter the fleet beginning in mid-2017. These aircraft will replace a portion of the capacity currently operated by the company’s regional partners, as the company expects to reduce by more than half the number of 50-seat aircraft in its fleet by 2019.

“Our customers have a preference for an improved travel experience, including first class seats, Economy Plus, and Wi-Fi. These aircraft are an efficient way to meet those needs while reducing 50-seat flying,” said Gerry Laderman, UAL’s acting chief financial officer. “

United based it’s fleet selection decision on passenger preference for larger aircraft. However, regional (50-seat) aircraft are the backbone of air service patterns to many small communities. As discussed in Chapter 3, frequency of service and capacity (size of aircraft) are directly related.

Briefly research this purchase announcement, choose a side and make your best case for one of the following: 1) placing larger passenger-preferred aircraft in service which will result in a loss of frequencies to small cities or 2) keeping more 50-seat aircraft in operation (which passengers generally do not prefer) to maintain a greater number of frequencies to smaller cities.

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Discussion 3: Aircraft Specifications

Unlocked: Thursday, September 12, 2019 9:00 AM EDT – Wednesday, October 9, 2019 11:30 PM EDT.

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At this point in the term, and with your new knowledge, you are being promoted to Assistant Fleet Planner for a major airline that is beginning to think about purchasing a new international-range wide-body aircraft.

What do you think are the most important aircraft attributes that must be considered (size, range, comfort, economics, ETOPS, etc) and where would you recommend your boss start his/her evaluation?

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Discussion 4: Revenue Management

Unlocked: Thursday, October 10, 2019 9:00 AM EDT – Wednesday, October 30, 2019 11:30 PM EDT.

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All commercial airlines have a function called revenue management, usually found in their Marketing Department. Research this function and provide your assessment of what this critical department does.

After you better understand this critical airline function, answer the question which has been asked since the dawn of the airline industry: “should an airline sell a ticket to a passenger for $1 if no one is going to purchase the seat?”.

What is your opinion? Defend your response to your classmates

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