Air Industry Analysis
INDUSTRY ANALYSIS PAPER:
AIRLINE INDUSTRY
Table of Contents Executive Summary Introduction Market Structure Industry Demand Cost Structure Analysis of Competitive Forces Conclusion References Appendix A
Executive Summary
Airlines companies are undergoing major changes to cope with the new challenges of the modern economy. Geopolitical factors, such as war and terrorism, the financial crisis of 2009, high entry barriers, as well as extreme weather events, are some of the factors that are driving these changes. Costs in fuel prices, wages and ticket prices are some of the demand drivers of this multi-billionaire industry. Also, there has been an industry-wide shakedown, which will have far-reaching effects on the industry 's trend towards expanding domestic and international services. The perception that air travel is an ordeal continues to grow, making it very difficult for airlines to charge the higher prices that are necessary to return to profitability.
Today Airlines provide a vital service, but factors including like the continuing existence of loss-making carriers, bloated cost structure, vulnerability to exogenous events and a reputation for poor service combine to present a huge impediment to profitability. While a handful of low-cost airlines have successfully managed to post consistent profits, by and large, profitable airlines are few and far between.
Introduction The global airline industry provides transportation to virtually every corner of the world. The airline companies employ many people, hold multi-billion dollar equipment inventory, and generate billions of dollars in yearly gross revenue. It facilitates economic growth, world trade, international investment and tourism. However, the industry can be very vulnerable to government regulations, economic influences, extreme weather events and geopolitical factors such as war and terrorism. The SIC/NAICS code for the industry is 4512 /4811. The
AIRLINE INDUSTRY
Table of Contents Executive Summary Introduction Market Structure Industry Demand Cost Structure Analysis of Competitive Forces Conclusion References Appendix A
Executive Summary
Airlines companies are undergoing major changes to cope with the new challenges of the modern economy. Geopolitical factors, such as war and terrorism, the financial crisis of 2009, high entry barriers, as well as extreme weather events, are some of the factors that are driving these changes. Costs in fuel prices, wages and ticket prices are some of the demand drivers of this multi-billionaire industry. Also, there has been an industry-wide shakedown, which will have far-reaching effects on the industry 's trend towards expanding domestic and international services. The perception that air travel is an ordeal continues to grow, making it very difficult for airlines to charge the higher prices that are necessary to return to profitability.
Today Airlines provide a vital service, but factors including like the continuing existence of loss-making carriers, bloated cost structure, vulnerability to exogenous events and a reputation for poor service combine to present a huge impediment to profitability. While a handful of low-cost airlines have successfully managed to post consistent profits, by and large, profitable airlines are few and far between.
Introduction The global airline industry provides transportation to virtually every corner of the world. The airline companies employ many people, hold multi-billion dollar equipment inventory, and generate billions of dollars in yearly gross revenue. It facilitates economic growth, world trade, international investment and tourism. However, the industry can be very vulnerable to government regulations, economic influences, extreme weather events and geopolitical factors such as war and terrorism. The SIC/NAICS code for the industry is 4512 /4811. The
References: Lee, Tail (2002). Competitive Airlines. Retrieved July 13, 2012 from http://www.scribd.com/doc/58820847/31/The-cost-structure-of-the-airline-industry#page=53 Pierson, Kawika (2011) Sundaresa, Sankar R. (2009). Introduction analysis of the airline industry. Retrieved July 17, 2012 from http://bcs.solano.edu/workarea/mgarnier/MGMT%2050/Southwest%20Porters%20-%20Brief%202.pdf The industry handbook: The airline industry Bisignani, Giovanni (2006) The airline industry is going to collapse Seng, Pauline.. Increasing Competition in the U.S. Domestic Airline Industry through International Competition.December 20, 2007 Snider, Connan Hirsch, Barry (2007) Unions and Wages in the US Airlines Industry . Retrieved July 18, 2012 from http://www.iata.org/whatwedo/Documents/economics/Hirsch_Unions_Wages.pdf) Airlines International (2010)