Business Case Studies

Continental Airlines Positioning in China

INTRODUCTION

Background. Continental Airlines is the world’s sixth largest airline. It has more than 3,000 departures throughout America, Europe and Asia. Continental services more destinations than any other carrier, worldwide. This includes 151 domestic and 133 international destinations. Continental is primarily categorized in the aviation industry segment and has “approximately 38,255 employees” (). According to Mergent’s, Continental Airlines “closing stock price was $24.79, with a market cap of $1.43,” and revenue, approximately $10 billion dollars, as of March 11, 2006 (can we get figures for a more recent date) ().

Vision. “It’s your world. We just fly around it” ().

Objectives. Continental Airlines’ executive management team strategize positioning itself in China, and establishing itself as a viable, pronounced presence within China’s borders. Continental airline’s short-term corporate objectives focus on restructuring the company. Long-term corporate objectives address: 1) client base, 2) products and services offered and 3) sustainability, profitability and revenue (). A significant question was posed to us as to, “How will Continental Airlines Position Itself in China?”

The Chinese market is a market that has a future, in 2000, China forecasted, “that the air express delivery market in China will double in the next five years” (). Since 2001, Continental has been in a “strategic alliance with Hong Kong International Airport.” Continental offers "a daily flight to Hong Kong, China from Newark International Airport, utilizing a unique new route over the North Pole, Russia, and China” (). We recommend that Continental should tap into cargo and servicing courier market, and should expand its global passenger flight routes in shared partnerships with China airline.

STRATEGIC RECOMMENDATIONS

Continental Airlines should focus on returning to sustained profitability and restructuring....