strategic-management

38 CHARLES M. BYLES
as a safe airline through its commitment to safety and the use of new state-of-the-art aircraft.
In the last nine years (with the exception of 2008), AirTran has been profitable and
recognized for a number of achievements, most recently the good service quality ratings
mentioned earlier.
Internal Factors
AirTran Airways, Inc., is a subsidiary of AirTran Holdings Inc. and operates scheduled airline
service in the United States (and one destination in Mexico—Cancun), primarily in short-haul
markets in the eastern United States. Although the company has its headquarters in Orlando,
its main hub of flight operations is Atlanta, where it is the second-largest carrier. As of March
2009, AirTran operates 86 Boeing 717-200 aircraft (117 seats) and 50 Boeing 737-700 aircraft
(137 seats) offering 700 daily flights to 57 destinations in the United States (including San
Juan, Puerto Rico) and Cancun, Mexico. The airline is classified by the U.S. Department of
Transportation as a “major airline” because of its $1 billion or more annual revenue.
Mission, Guiding Principles, and Values
AirTran’s mission statement is: “Innovative people dedicated to delivering the best flying
experience to smart travelers. Every day.” AirTran also has some guiding principles. The
first and most important is safety, which appears as the first guiding principle (“Taking
personal responsibility for the safety of each traveler and every crew member) and the first
value (“A Total Commitment to Safety—in every decision and every action, every time,
every day). The second important aspect of air travel addressed in these statements is
service. The mission of AirTran is “Innovative people dedicated to delivering the best
flying experience to smart travelers. Every day.” Other guiding principles are courtesy,
pride, teamwork, and innovation. A full statement of the company’s mission, guiding
principles, and values is given on its Web site.
Management and Human Resources
AirTran’s leadership team consists of Robert L. Fornaro, chairman, president, and CEO;
Stephen Kolski, executive vice president, operations and corporate affairs; Steven A.
Rossum, executive vice president of corporate development; as well as senior vice presidents,
vice presidents, and other managers. The board of directors consists of 10 members
including Fornaro.
Robert L. Fornaro joined AirTran Airways in March 1999 as president and chief
financial officer. He became chief operating officer and was elected to the board in 2001 and
was appointed chief executive officer on November 1, 2007. Fornaro had prior airline experience
at Braniff International Airways, Trans World Airlines, Northwest Airlines, and most
recently at US Airways, where he directed the airline’s route planning, pricing and revenue
management, and overall corporate strategy. Fornaro’s total compensation for 2008 was
$1.5 million (including a bonus of $375,000), a 69 percent drop from his 2007 total compensation,
which was $4.9 million. During 2008, AirTran’s stock price fell nearly 36 percent.
Exhibit 1 contains a list of AirTran’s leadership team as identified on the company’s Web site
(which also gives a detailed biography of each executive). AirTran operates from a functional
(centralized) organizational structure with no profit centers or divisions. Note there is only
one female among the top 17 executives.
AirTran employs over 9,000 crew members in a variety of job positions as follows:
• Administrative/Professional/Technical (e.g., finance, accounting, information
technology, human resources, and marketing)
• Customer Service—Airport Operations (e.g., ticketing, baggage operations,
managing arrival and departure gates)
• Customer Service—Reservations/Call Center (e.g., providing flight information,
making reservations)
• Ground Operations (e.g., loading and unloading baggage, mail, and cargo, catering
and cleaning aircraft)
• Flight Operations—flight attendants, pilots, flight operations, management
• Maintenance/Engineering (e.g., aircraft maintenance and repairs)