The Impact of United Airlines' Changes
The company United Airlines when started making a lot of change such as structural and organizational was hard. It is not fair to discontinue this service. The relative costs per flight which include the costs of fuel, salaries for pilots, to cater for flight attendants, service of food that used on the plane. Most of the articles speculate that an included share of the costs related in maintaining the hubs. Poor decision making of the top managers brings the airline's image at risk to the public (Brickley, 2015). Analyzing the costs of ticket agents, costs of building, luggage handlers, chargers at the gate are diminishing as time goes. Imagine the revenue taken on the United airline from San Francisco to Washington do not cover the costs hence should be closed.
The Benefits of Marginal Analysis
In a marginal analysis, the benefits that come with the functions of the airline, and the cost of different alternative expenses. The report identifies total revenue and total damages caused by a change in the out-input alternatives. Marginal analyses that conducted were very accurate and precise, not including the price from the two cities since they are standard costs. A reliable tool of Nash equilibrium that helps economists gauge competition in the airlines and set their prices, manage self-defeating decisions by managers and strategies of players’ outcomes, in this case, other airlines.
Controlling Costs with Marginal Costing
The limited application, fixed costs can be controlled by managers as variable costs by lower Management hence a tool of Management (Zardkoohi, 2016). Despite the increase of sale, there may be a decrease in profits of the united airline. Another application is the evaluation of the performance of the flight attendances, flight crew, and pilots need to assess. In this way, marginal costing ensures easy determination of cost controls of the firm's production. By allocating fixed overhead cost that will put the airline on the favorable economic terms.
Price Competition and Strategies
Price competition between airlines is ordinary, whereby they are fighting low-cost rivals in the business. Prices may affect their profitability because of customers' loyalty. Investors are usually worried when the fare costs are relatively cheap when comparing last year price performance of the airline surpassed their competitors. Delta American airlines are the primary competition for them, and what other airlines do fight low prices is mainly changing appearance as a tactic to blend with competitors (Zaal, 2017). The competition changes their airlines to better to compete with carriers with little costs. Improving the cabins and upgrading the flight system, WIFI, and connectivity in the lobby is another way to curb issues of low-cost competitors.
The Impact of Market Factors
In conclusion, the supply of airline curve shows that airlines improve people’s lives and the oligopoly market has few companies that provide such products and services. The real determinant is the income. When a nation experiences steady growth in the harsh economy, the average salary of people will inevitably increase. Fortunately, air ticket as an example, where an increase in revenue will lead to the rise in the demand for air ticket purchased. In the market, prices of related goods and numbers of buyers in the airline industry are determinants that can affect the airline's products and services. Behavioral theories and other strategies that the environment to predict outcomes and how variables relate. Managers opt to analyze employee performance, benchmarking, and research of the market situations. Example, if united airlines reward good performed employees, there will be an increase in productivity from other crew and pilots to be recognized.
References
Brickley, J., Smith, C., " Zimmerman, J. (2015). Managerial Economics and Organizational Architecture, 6. izdanje.
Zaal, R. O., Jeurissen, R. J., " Groenland, E. A. (2017). Organizational Architecture, Ethical Culture, and Perceived Unethical Behavior Towards Customers: Evidence from Wholesale Banking. Journal of Business Ethics, 1-24.
Zardkoohi, A., " Bierman, L. (2016). How firms shape income inequality: Stakeholder power, executive decision making, and the structuring of employment relationships. Academy of Management Review, 41(4), 744-749.
