Harvard Case - Orlando International Airport: Landing International Airline Business
"Orlando International Airport: Landing International Airline Business" Harvard business case study is written by Alon Ilan, Meredith Lohwasser, Jennifer Dugosh. It deals with the challenges in the field of General Management. The case study is 12 page(s) long and it was first published on : Jul 31, 2013
At Fern Fort University, we recommend Orlando International Airport (MCO) adopt a comprehensive strategy to attract international airlines, focusing on a multi-pronged approach encompassing infrastructure development, marketing and branding, and strategic partnerships. This strategy will leverage MCO's existing strengths while addressing key challenges to position the airport as a leading international hub in the Southeastern United States.
2. Background
Orlando International Airport (MCO) faces a critical juncture. While experiencing strong domestic passenger growth, MCO lags behind other major U.S. airports in attracting international airlines. The case study highlights the airport's ambitions to expand its international presence, driven by the region's thriving tourism industry and the potential to tap into lucrative emerging markets. MCO's leadership recognizes the need to address infrastructure limitations, enhance marketing efforts, and cultivate strategic partnerships to achieve this goal.
The main protagonists in this case are the airport's leadership team, including CEO Kevin Thibault, and the various stakeholders involved in the decision-making process, including airlines, tourism businesses, and local government officials.
3. Analysis of the Case Study
SWOT Analysis:
- Strengths:
- Strong domestic passenger traffic and a robust tourism industry
- Excellent infrastructure with a modern terminal and ample runway capacity
- Strategic location in a popular tourist destination
- Growing demand for international travel from the region
- Weaknesses:
- Limited international airline presence and route network
- Lack of dedicated international facilities and services
- Challenges in attracting international passengers due to limited marketing and branding efforts
- Opportunities:
- Growing demand for international travel from emerging markets
- Potential to attract new international airlines and routes
- Development of new international facilities and services
- Partnerships with tourism businesses and government agencies
- Threats:
- Competition from other major international airports in the region
- Economic uncertainty and potential travel disruptions
- Increasing fuel costs and operational expenses
Porter's Five Forces:
- Threat of New Entrants: Moderate - Entry barriers are relatively high due to infrastructure investments and regulatory requirements, but the potential for new international airlines entering the market exists.
- Bargaining Power of Buyers: Moderate - Passengers have a range of choices for international travel, but MCO's unique location and attractions provide some bargaining power.
- Bargaining Power of Suppliers: Moderate - Airlines have some bargaining power due to limited competition, but MCO's infrastructure and potential for growth provide leverage.
- Threat of Substitutes: High - Passengers can choose alternative modes of transportation, such as cruise ships or driving, for international travel.
- Rivalry Among Existing Competitors: High - MCO faces competition from other major international airports in the region, including Miami International Airport and Atlanta Hartsfield-Jackson International Airport.
Key Findings:
- MCO's success in attracting international airlines hinges on its ability to address infrastructure limitations, enhance marketing and branding efforts, and cultivate strategic partnerships.
- The airport needs to invest in dedicated international facilities, including customs and immigration processing, and develop a comprehensive marketing strategy to attract international passengers.
- Building strong relationships with airlines, tourism businesses, and government agencies is crucial for achieving sustainable growth in international passenger traffic.
4. Recommendations
1. Infrastructure Development:
- Invest in Dedicated International Facilities: MCO should prioritize the construction of a dedicated international terminal with customs and immigration processing capabilities. This will enhance the passenger experience and attract more international airlines.
- Expand Runway Capacity: To accommodate larger aircraft and increased traffic, MCO should consider expanding runway capacity and improving ground handling operations.
- Improve Connectivity: MCO should invest in infrastructure upgrades to improve connectivity with major international hubs, including expanding its network of direct flights and exploring partnerships with regional airlines.
2. Marketing and Branding:
- Develop a Comprehensive Marketing Strategy: MCO should develop a targeted marketing campaign focused on attracting international passengers. This campaign should highlight the airport's unique features, including its location, connectivity, and services.
- Enhance Brand Awareness: MCO should invest in branding initiatives to raise awareness among international travelers. This includes promoting the airport's brand through social media, travel publications, and international trade shows.
- Partner with Tourism Businesses: MCO should collaborate with tourism businesses in the region to develop joint marketing campaigns and package deals that appeal to international travelers.
3. Strategic Partnerships:
- Engage with International Airlines: MCO should proactively engage with international airlines to discuss potential route expansion and partnerships. This includes offering incentives, such as landing fees and marketing support, to attract new airlines.
- Forge Partnerships with Government Agencies: MCO should collaborate with local and state government agencies to promote international tourism and streamline visa processing for international visitors.
- Develop Strategic Alliances: MCO should explore strategic alliances with other airports and travel industry partners to expand its international network and enhance its competitiveness.
5. Basis of Recommendations
These recommendations are based on a thorough analysis of MCO's current situation, considering its strengths, weaknesses, opportunities, and threats. They align with the airport's mission to provide world-class service and facilitate economic growth in the region.
External Customers and Internal Clients: The recommendations prioritize the needs of international passengers, airlines, and tourism businesses, while also considering the needs of MCO's internal stakeholders, including employees and airport operators.
Competitors: The recommendations address the competitive landscape by focusing on differentiating MCO from other major international airports in the region through its unique offerings and strategic partnerships.
Attractiveness: The recommendations are expected to generate a positive return on investment through increased passenger traffic, revenue generation, and economic development.
Assumptions:
- The global tourism industry will continue to grow, driving demand for international travel.
- MCO will be able to secure funding for infrastructure improvements and marketing initiatives.
- International airlines will be receptive to MCO's efforts to attract them.
6. Conclusion
By implementing these recommendations, Orlando International Airport can successfully attract international airlines and become a leading international hub in the Southeastern United States. This strategy will leverage MCO's existing strengths, address key challenges, and position the airport for sustainable growth in the global aviation market.
7. Discussion
Alternatives:
- Focus solely on domestic growth: This option would be less ambitious but could be a more conservative approach, focusing on maximizing domestic passenger traffic. However, it would limit MCO's potential for international growth and economic diversification.
- Partner with a single international airline: This could provide a quick win but may limit MCO's options and bargaining power in the long run.
Risks and Key Assumptions:
- Economic downturn: A global economic downturn could negatively impact international travel demand, affecting MCO's efforts to attract airlines.
- Competition from other airports: MCO faces intense competition from other major international airports in the region, which could limit its success in attracting airlines.
- Funding availability: Securing funding for infrastructure improvements and marketing initiatives is crucial for the success of MCO's strategy.
Options Grid:
| Option | Pros | Cons |
|---|---|---|
| Comprehensive Strategy | Maximizes international growth potential, positions MCO as a leading hub | Requires significant investment and commitment |
| Focus on Domestic Growth | Lower risk, less investment required | Limits international growth potential, may miss out on lucrative opportunities |
| Partner with a Single Airline | Quick win, potentially lower costs | Limits options, may create dependence on a single partner |
8. Next Steps
Timeline:
- Year 1: Develop a detailed strategic plan, secure funding, and begin infrastructure improvements.
- Year 2: Launch marketing campaign, engage with international airlines, and build strategic partnerships.
- Year 3: Complete infrastructure upgrades, monitor progress, and adjust strategy as needed.
Key Milestones:
- Secure funding for infrastructure improvements.
- Develop a detailed marketing strategy.
- Establish partnerships with key international airlines.
- Launch marketing campaign.
- Monitor progress and adjust strategy as needed.
By taking these steps, MCO can transform itself into a leading international airport, attracting new airlines, boosting economic growth, and enhancing its position as a major gateway to the Southeastern United States.
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Case Description
Each year, Orlando International Airport serviced more than 35 million passengers. Many were attracted to Orlando, Florida, for tourism, vacations and fun, as the area was home to some of the most popular theme parks in the United States. Others travelled to Orlando on business, as the area had attracted international companies, and domestic companies had a growing presence in other countries. The airport needed to continue to attract new airlines and to expand its services to new regions and countries. Local business people collected information on the growth of travel between Orlando and other regions, underserved markets, and time and cost savings. The challenge now was how to use the data to decide on which countries and industries to focus on to attract new business.
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