Case Name :      XiamenAir in 2014: The Dreamliner Decision

Authors :           W. Glenn Rowe, Xiaomei Guo

Source :             Ivey Publishing

Case ID :            W14159

Discipline :        General Management

Case Length :    19 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

In spring 2014, XiamenAir is the most profitable of the five largest airlines in China. With bases in Xiamen, Fuzhou and Hangzhou, its flight network covers major cities in China with international service to Macao, Taiwan, Hong Kong and other Southeast Asian countries. The company prides itself on its differentiation strategy: customer service, building a brand and reputation that its customers trust and providing a service for which its customers are willing to pay a premium price even when there are low cost/low price carriers available. Its management is contemplating buying six new Boeing Dreamliner wide-body aircraft that will allow the company to expand its market to Europe, Australia and western North America. Will this purchase enable Fujian Province to more quickly become established as the regional hub for Southeast Asia, Northeast Asia and cross-strait transportation? Will it help speed China’s push to internationalize its passenger airlines? In the face of growing competition from high-speed rail networks and both Chinese and international airlines, the management must decide how best to grow the company and maintain its profits.