Fronters Essay Example | Topics and Well Written Essays - 750 words

Fronters - Essay Example Company has an opportunity to make acquisitions (Ringbeck and Roska). Due world financial crisis business, industry has faced huge losses so as an airline industry, but it also present an opportunity to expand business through alliances and mergers. Company can raise money from different financial institutions that offer lower interest rates and can borrow at fixed interest rate. Fixed rate borrowing will prevent the company from bankruptcy, and Frontier can invest more in its expansion rather give as interest. Inflation is impacting the business increasingly day by day. There is great fluctuation in prices of each company that is a big threat for the company. However, managing prices in uncertain conditions is not a piece of cake. Airline industry is covered with unexpected problems and to deal with these problems is difficult. Therefore, it is a big threat for Frontier. For example, in the condition of storm strikes company needs fast communication channels that are a big challenge for Frontier. Because of poor communication system, company has to face negative sentiments of customers that are base for Frontier airlines. Due to economic and financial crisis, the cost of raw material is increasing which cause to increase the cost of services. Therefore, end price which will slowdown the competitive advantage of Frontier airlines. Increased cost is a threat for Frontier. Exchange rate fluctuation is also a threat for the company. In the case of strong Currency, Company will lose its competitive advantage because customers from countries that have lower currency rate will not pay higher prices and company will have to face a price war. Frontier airline was found in 1950 by the merger of three airlines; Arizona Airways, Monarch and Challenger airways. In 1985, the airline was acquired by people express and due to some financial difficulties, the airline faced bankruptcy (Carson, 74). The new Frontier airline was