This reduces not only labor expenses but the operational costs of crew rostering, capacity planning, ground handling, and scheduling of flights (Knorr Zigova, 2005).Networking consists of the utilization of the Pricing and Revenue Optimization System, an algorithmic application that determines to price based on customer information and yieldable demand stored electronically (Riddell, 2006). That satisfies elements of process automation to avoid labor expenditures associated with manual pricing strategists and determines logistical solutions for better service delivery associated with ticket pricing. Southwest further utilizes the Varolii Interact Platform, an electronic system by which managers interact with pilots using SMS text messages to ensure on-time flight scheduling and overall operational cost reduction (Close Up Media, 2011). This improves logistics on the value chain framework, both inbound and outbound.Organization and management at Southwest are highly decentralized, offering a horizontal flow of information, culture, and input from empowered employees. Southwest conducts “Rocking Chair Sessions” where impending retirees share their history and cultural experiences with Southwest to expose new-hires to the Southwest team-focused philosophy (D’Aurizio, 2008). Decentralization and cultural unity provide first-class customer service and employee motivation, thus improving human resource management in the value chain.American Airlines conducts foodservice research and development, spending between $1 and $75 per customer on these efforts for coach and first-class passengers, respectively (Smyth, 2003). This provides greater service quality as well as affecting procurement for raw food purchases to provide superior onboard meals.Strategic alliances and incentives provisions are the most valuable marketing and sales commodity for American Airlines. This airline often partners with other airlines or well-known brands to improve their market visibility. Incentives improve service delivery under the value chain as well by providing its current price match guarantee for customers who book flights, cars, hotels, or other vacation packages and find lower prices on another website within one day (PR Newswire, 2011).
Airline Administration Test