Airline industry

Topics: Airline, Avianca, Aerospace Pages: 3 (795 words) Published: December 5, 2013

Airline Industry

Introduction

The global airline industry has always been an integral part of the world economy due to its major economic force for transportation, manufacture, technology and other sectors in modern society (Business Vibes, 2012). Development of worldwide aviation transportation has meant that the industry has been able to cover virtually every country in the world since 1905. The Airline industry now consists of over 2000 airlines operating more than 23,000 aircraft that provide service to over 3700 airports. (Businessvibes, 2012) The International Air Transport Association (IATA) suggested that profits where reduced to $4 billion in 2011. Scope & Size Of the Industry

In 2011, over 2.8 billion passengers were carried between the world’s airlines. This demonstrates the mass appeal to transportation by air and the fact that it allows employment to over 56 million people worldwide in aviation and tourism. (ATAG, 2012). To put the airline industry into perspective, it would rank 19th in the world generating $539 billion dollars GDP per year. This is considerably larger than some G20 countries, estimated similarly to the same size as Switzerland. (ATAG, 2012). It is forecast that by 2026, the industry will contribute $1 trillion to world GDP (ATAG, 2012). Despite the fact there is over 2000 airlines, each airline generally relies upon either one of the two-airline manufactures. These are Boeing or Airbus, both that are extremely wealthy companies. Boeing & Airbus are extremely competitive against each other and often have court disputes against each other. The most recent dispute was dated in May 2011, where both companies claimed victory after the World Trade Organisation overturned the ruling in which saw Airbus receive billions of Euros in illegal subsidies. (BBC News, 2011). The US complained to the WTO as they thought the $18 billion subsidiary was deemed to ‘cause serious prejudice’ to US interests (BBC News,...
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