Pricing Strategy and Management
1. What assessments can be made about the "Shuttle by United" market and financial position based on 1994 Fourth Quarter results? Perform the same 1994 fourth quarter profitability analysis for the "Shuttle".
2. Based on your assessments, how would you interpret United's decision to:
(a) Discontinue "Shuttle by United" service for the Oakland-Ontario market. As part of your analysis, prepare a 2X2 grid showing the contested routes and whether or not each makes a profit or loss for Southwest and "Shuttle by United"?
(b) Raise the one-way walk-up first class and coach fare on all 14 "Shuttle by United" routes by $10.00