ALABAMA AIRLINES: A

Alabama Airlines opened its doors in December 2001 as a commuter service with its headquarters and only hub located in Birmingham. A product of airline deregulation, Alabama Air joined the growing number of short-haul, point-to-point airlines, including Lone Star, Comair, Atlantic Southeast, Skywest, and Business Express.

Alabama Air was started and managed by two former pilots, David Douglas (who had been with now defunct Midway Airlines) and Michael Hanna (formerly with Continental). It acquired a fleet of 12 used prop-jet planes and the airport gates vacated by Delta Airlines' 2001 curtailing flights due to terrorist attacks.

One of Alabama Air's top competitive priorities is on-time arrivals. The airline defines "on-time" to mean any arrival that is within 20 minutes of the scheduled time.

Mike Hanna decided to personally monitor Alabama Air's performance. Each week, for the past 30 weeks, Hanna checked a random sample of 100 flight arrivals for on-time performance. The table that follows contains the number of flights that did not meet Alabama Air's definition of on-time.

DISCUSSION QUESTIONS

(1) Using a 95% confidence level, plot the overall percentage of late flights (p) and the upper and lower control limits on a control chart.

(2) Assume that the airline industry's upper and lower control limits for flights that are not on-time are .1000 and .0400, respectively. Draw them on your control chart.

(3) Plot the percentage of late flights in each sample. Do all samples fall within Alabama Airlines' control limits? When one falls outside the control limits, what should be done?

(4) What can Mike Hanna report about the quality of service?