Case Study on Jal
- Submitted by: clchua2009
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- Category: Other
- Date Submitted: 02/25/2011 12:27 AM
- Pages: 14
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Introduction
Japan Airline Corporation was established in 1951. She became the national carrier of Japan in 1953, and has continued to provide air transportation service both domestically and internationally throughout these years. In 2002, JAL merged with Japan Air system, making it the sixth largest airliner in the world by passengers carried.
However, the economic downturn in 2009 had adversely affected the commercial airline industry, and, the sharp fall in demand of air travel had negatively impacted the financial performance of all airlines in the world.
While the entire industry has been under performing, JAL’s inefficient operations have caused them to be affected even more severely. This is revealed by the fact that they have filed for bankruptcy protection in January 2010, even though other airline companies remain solvent. Furthermore, $3.3 billion dollars of state-backed support is being planned to be injected into JAL, and this is on top of the $1 billion dollar bailout they had received in 2009.
JAL files for bankruptcy protection
The Japanese government is bleeding into their reserves to intervene and this is definitely not sustainable in the long run. Clearly something needs to be done to ensure JAL’s survivability.
Hence, our project seeks to investigate the key expense factors by using various methods of analysis and provide recommendations to bring JAL to profitability.
Content Page
Industry Overview
Company overview
CVP Analysis
Variance Analysis
Capital Budgeting
Conclusion
Industry Overview
[pic]
Porters’ five forces is a framework that lays down the competitive intensity of an industry. The fives forces of this framework are:
• Buyer’s power
• Supplier’s power
• New entrants
• Threats of substitute
• Degree of rivalry
Buyer’s power represents the bargaining power of customers, which in this case are those who buy airplane tickets be it for business or leisure travel. The...
Japan Airline Corporation was established in 1951. She became the national carrier of Japan in 1953, and has continued to provide air transportation service both domestically and internationally throughout these years. In 2002, JAL merged with Japan Air system, making it the sixth largest airliner in the world by passengers carried.
However, the economic downturn in 2009 had adversely affected the commercial airline industry, and, the sharp fall in demand of air travel had negatively impacted the financial performance of all airlines in the world.
While the entire industry has been under performing, JAL’s inefficient operations have caused them to be affected even more severely. This is revealed by the fact that they have filed for bankruptcy protection in January 2010, even though other airline companies remain solvent. Furthermore, $3.3 billion dollars of state-backed support is being planned to be injected into JAL, and this is on top of the $1 billion dollar bailout they had received in 2009.
JAL files for bankruptcy protection
The Japanese government is bleeding into their reserves to intervene and this is definitely not sustainable in the long run. Clearly something needs to be done to ensure JAL’s survivability.
Hence, our project seeks to investigate the key expense factors by using various methods of analysis and provide recommendations to bring JAL to profitability.
Content Page
Industry Overview
Company overview
CVP Analysis
Variance Analysis
Capital Budgeting
Conclusion
Industry Overview
[pic]
Porters’ five forces is a framework that lays down the competitive intensity of an industry. The fives forces of this framework are:
• Buyer’s power
• Supplier’s power
• New entrants
• Threats of substitute
• Degree of rivalry
Buyer’s power represents the bargaining power of customers, which in this case are those who buy airplane tickets be it for business or leisure travel. The...