Business Finance Homework Help

Read “OM in the News: Why Do the Empty Planes Keep Flying?” from the textbook blog.

Also, watch the fascinating video (available on YouTube) about Demand and Capacity Management in the Air Cargo Industry called, “Air Cargo’s Coronavirus Problem” (View time 12:52).

Then, based on the reading and video, address these questions:

1. What types of capacity changes could airlines make that might decrease the necessity of flying near-empty passenger planes?
2. What changes do you think had to be made at the Anchorage airport during April 2020?
3. What other industry has or could adjust its capacity and service offerings to continue to make money during the pandemic despite a huge drop in its traditional demand?

After posting your inital response to the questions, respond to at least two others’ posts in the discussion.

First post: Rylan

I think it would be extremely beneficial if each airline had a number of planes that were equipped to only carry a small number of passengers. If they had these planes available when need be, they could send them out to complete a flight that is scheduled to have a small number of passengers and carry cargo with the remaining space on the plane. It seems like too much a hassle to strap packages down on seats that were meant for passengers. Having planes designed to carry cargo and a small number of passengers would add to the company’s revenue. Another possible solution that came to my mind was joint-flights. A single plane could have the capability of carrying passengers who desire one of two destinations the plane will stop. It is like a subway system in large cities, but for planes. The only thing that may be an issue is cleaning between flights.

Like most places, I am certain Anchorage was required to take extra precautions due to the COVID-19 pandemic. Especially since the flights they were receiving at their airport were from Asia. Since the video mentioned that the U.S. was the leader of new cases of CoronaVirus in April of 2020, I assume the Anchorage airport needed to bring in more fuel than usual to fuel the cargo planes carrying medical supplies to the U.S.. With the increase in the number of flights passing through Anchorage, more employees also might have been added to the operating structure of the airport.

I think restaurants are a big industry that adjusted or could have adjusted to continue to make money during the pandemic. I understand that people were and still are scared of the disease that continues to devastate the world, but there are also others who did not stop living the way they had before the pandemic. Restaurants like McDonald’s, Dairy Queen, and Arby’s had no problem adjusting to the pandemic because they offered drive-thru food service beforehand. However, sit-down dinners could have restricted the store to 50% capacity or less to follow the six foot guidelines the CDC put in place or they could have started a delivery system to continue to bring in some revenue.

Second post: Megan

In order to decrease the necessity of flying near-empty passenger planes, airlines could move more towards transporting cargo and offering less flights for trasporting people, since the demand for transporting cargo is higher right now. They could also modify the planes, so they can carry both cargo and people on flights with less passengers. A way they could do this could be rearranging seats, making it so they have more space to put cargo.

With the increased flights coming into Anchorage, the airport needed to change it’s operations. They could do this by increasing their staff as well as remodeling the building in order to make it more useful to house and transport the cargo coming in. They also potentially decreased the amount of food and shops within the airport due to the lack of travelers. Instead, they probably moved those employees to different positions needed in the transportation of cargo.

Another industry that needed to change it’s service offerings in order to continue to make money during the pandemic is hotels. With less of a need for hotel rooms due to the lack of travelers, during the height of the pandemic, many hotels were used to house people that needed to quarantine, or turned into make-shift hospitals with many medical centers being at their maximum capacity. By making this modification, hotels were still able to make money without the need for travelers to book hotel rooms. Another industry that could make changes to meet demand is the public transportation industry. During the time where schools and industries were shut down, there was less of a need for public transportation. Instead, the public transporation industry could have used some of their buses to help deliver packages (like UPS, etc.) due to an increase of people using online ordering.