In our globalizing world all of the processes are directed at receiving bigger incomes, buying more goods, purchasing larger volumes and numbers of units, consuming more and spending less. It seems like the suggestion of Mark Lapidus is based on the global way of thinking. Basically, the financier is trying to promote a completely new strategy for the airlines of the United States.
The lines he is addressing are Delta and American Airlines. The innovation introduced by Mark Lapidus is focused on the idea that by purchasing a bigger plane the airlines will be able to transfer larger numbers of people. The financier sees this strategy as a massive revenue improvement for the airlines of the United States, but it does not seem that the companies view this investment the same way.
There are several significant barriers that stop the leaders of the airlines from making such serious step and including Airbus jumbo-jet into their network. According to Mark Lapidus, the purchase of A380 will allow the airlines attract the travelers of business class, the wealthy customers that want to use the best airlines only (Bachman, par. 5).
One of the main obstacles that work against Lapidus’ idea is the recent crisis in the industry of air transfers. After that negative experience the carriers are concentrated on the unit costs in order to minimize the risk of bankruptcies. The companies are very careful about the excess capacity of their planes because it influences that ticket prices directly (Johnsson, par. 11).
Originally, Airbus targeted by Lapidus has the capacity to carry five hundred and twenty five passengers in its two decks, but most of the international airlines that employ these jets prefer to use the configurations with less density. In these cases the double-deckers become luxury flagships (Airbus Wins $8.3 Billion Order, par. 6). The main principle of the plan Lapidus has for the A380 is adding seats to it in order to make it carry even more passengers. The financier is deeply impressed with the economical performance of A380.
Although the project described by Mark Lapidus sounds good and financially profitable, the airlines of the United States are not very excited about this plan. First of all, the size of the Airbus may become the cause of forced changes in the whole infrastructure of American airlines designed for smaller and more compact jets. Besides, the whole system of operation of the airlines of the United States is oriented at flexibility.
Numerous small planes travel many times a day giving the passengers more alternatives and choices. Massive double-deckers will take longer to fuel and to fill in. Such jets will only be able to travel several times a week. This creates a serious restriction for the airlines. Finally, the excess capacity factor worries the investors quite a lot, which is another serious obstacle for Lapidus’ project.
Mark Lapidus hopes to win market share through this innovation, as the customer demand for this change is not very significant. The companies are hesitant about their final solutions because the innovation can easily turn into a massive financial trouble and create unwanted problems for the companies. Mark Lapidus is determined to demonstrate the advantages of the purchase of A380 to the investors. To my mind, the risk is too big and the airlines will decline the proposition of Lapidus, as the super-jets do not fit into the current way of operation and main strategies of the airlines in the U. S.
Works Cited
Airbus Wins $8.3 Billion Order. Amedeo. 2014.
Bachman, Justin. The A380 Is Coming to America? Yes, Says a Guy Who Leases Them. 2014. Web.
Johnsson, Julie. A380 Booster Wages Lonely Crusade for Airbus Jumbo Jet. 2014. Web.