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Student’s Name

Institutional Affiliation

Course

Professor’s Name

Due Date

Problems in Case 3

Top 3 Issues in Case 3.

 Global Airline Industry Crisis due to COVID-19

A sharp decline in travel demand brought about by the COVID-19 pandemic's abrupt and severe

effects on the airline sector has left airlines all around the world facing financial difficulties.

 Uneven Governmental Support and Economic Impact

Different governments have provided varying levels of financial support to their national airlines

during the pandemic, creating an imbalance in the industry. This has implications for the

survival, reach, and indebtedness of different airlines.

 Challenges in Capacity Reduction and Cooperative Management

The need for retrenchment and capacity reduction in the airline industry poses a challenge for

alliance members. Coordinating these efforts cohesively becomes crucial for the long-term

stability of global constellations like Star Alliance.

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Most Urgent and Important Problem: Global Airline Industry Crisis due to COVID-19

Analysis

The COVID-19 pandemic-related worldwide airline sector disaster is the most pressing and

significant issue in Case 3. This crisis is paramount because it poses an existential threat to the

entire industry and directly impacts Star Alliance and its member airlines. Critical facts that

highlight the severity of this issue are as follows.

Major airlines, including those in the Star Alliance, have announced record layoffs due to

the depletion of government financial support. For example, American Airlines laid off nearly

19,000 workers, and by October 2020, United planned to lay off up to 36,000 workers. This

signifies a severe financial strain and indicates the urgent need for solutions (Busuttil 121). The

industry is undergoing a significant retrenchment, with a substantial decline in passenger demand

and ongoing uncertainties regarding the recovery timeline. With projections suggesting that

passenger levels may not return to pre-pandemic levels until 2025, the urgency to address this

crisis is evident.

Objectives for the Company

The primary goal for Star Alliance amid the industry crisis is survival and recovery (Busuttil

124). The objectives include:

1. Ensure Financial Stability: Secure the financial stability of member airlines by implementing

strategies to navigate the economic challenges posed by the pandemic.

2. Rebuild Customer Trust: Develop and implement health and safety procedures to rebuild

customer trust in air travel, emphasizing safety and adherence to COVID-19 precautions.
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3. Strategic Planning for the Future: Devise a strategic plan for the future, considering whether

the alliance should continue growing, introducing new services, or allowing more individual

freedom for member airlines.

How Fixing the Problem Helps

Addressing the global airline industry crisis is fundamental to achieving the goals and

objectives outlined above. Financial stability ensures the alliance's survival, rebuilding customer

trust is crucial for reviving travel demand, and strategic planning positions Star Alliance for a

resilient and adaptive future in the post-pandemic aviation landscape. A successful response to

this crisis will not only contribute to the recovery of individual member airlines but also

strengthen the long-term viability of Star Alliance as a leading global aviation alliance.
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References

Busuttil, Laurie George, and Susan J. Van Weelden. "The Student Guide to the Case Method."

Advanced Business Communications (2018): 5.