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Case
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Reference no. 399-154-1
Authors: Leo Paul Dana (Nanyang Business School (NTU))
Published in: 1999
Length: 8 pages
Data source: Published sources

Abstract

In contrast to the executives of most major airlines - who were concerned about the effect of increasing fuel prices, on airline profitability - Gulf Air experienced a different demand pattern; it felt a drop in passengers when the world price of petrol fell. However, higher oil prices attracted more executives and engineers to the Gulf, contributing to the airline''s payload. As the price of oil rose during the late 20th century, it was expected that Gulf Air would face increased demand. Yet, the firm had sold off aircraft and cancelled orders for new planes, thereby decreasing its capacity. To place new orders for planes would imply waiting for delivery. The acquisition of used aircraft would speed up matters, but this alternative might tarnish the firm''s image. Executives were wondering what to do and how to proceed.
Location:
Industry:
Size:
Large
Other setting(s):
1999

About

Abstract

In contrast to the executives of most major airlines - who were concerned about the effect of increasing fuel prices, on airline profitability - Gulf Air experienced a different demand pattern; it felt a drop in passengers when the world price of petrol fell. However, higher oil prices attracted more executives and engineers to the Gulf, contributing to the airline''s payload. As the price of oil rose during the late 20th century, it was expected that Gulf Air would face increased demand. Yet, the firm had sold off aircraft and cancelled orders for new planes, thereby decreasing its capacity. To place new orders for planes would imply waiting for delivery. The acquisition of used aircraft would speed up matters, but this alternative might tarnish the firm''s image. Executives were wondering what to do and how to proceed.

Settings

Location:
Industry:
Size:
Large
Other setting(s):
1999

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