Airline Industry. Research Essay

Introduction

Airline industry is one of the most efficient and competitive among long distance transport today. It has also changed the way in which people live and conduct business by shortening travel time and altering our concept of distance, making it possible for us to visit and conduct business in places once considered remote. Not only airline industry facilitates economic growth, world trade, international investment and tourism, it is also one of the major engines powering the globalization of businesses and services.

The size of the airline industry today, comprises of over 2000 airlines functioning more than 23000 aircraft, providing services to over 3700 airports that has contributed 35% of the global growth. Over the past 30 years, the growth of global air travel has increased an average approximately of 5% per year. According to International Air Transport Association (IATA) latest September 2012 financial forecast expects the airline industry worldwide to earn net profits of $4.1 billion in year 2012. These airlines transport close to 2 billion passengers annually and 40 percent of interregional exports of goods (by value).

Scope of Airline Industry

Airline industry provides a wide range of products and services that caters to different parts of the world, and serves as scheduled services or charters by meeting the business needs for cargo shipments and meeting the demand of both business and leisure passengers. There are various mains sectors in the industry to ensure the productivity and services.

Sectors in the airline industry

The various types of airline personnel in terms of flight crews and flight attendants are responsible for the operation of aircraft and providing passenger services while airborne. As for ground crews and airline lounge employees are responsible for operation and providing passenger services at the airport.

Airports where airline companies have established an engineering base as a hub for its scheduled flights. Airport operators also charge fees for the usage of gates.

Airline alliances

Airline alliances are strategic groups wanting to achieve common strategic objectives. Most large airlines joined alliances with smaller airlines in order to offer valued added products and services to consumers by extending its network of relationships with other airlines.

Diagram of key the major alliance groups.

Star alliance is the largest and most geographically diverse alliance in the world.
The alliance comprises 27 airlines. Catering to 670 million annual passengers ,offers 21,900 daily departures flights, generate sales revenues of US$181 billion. Star claims that it provides customers a global reach that no other alliance can match. Holding market share of 22% in airline industry

The OneWorld alliance group is the second largest and most geographically diverse. The Oneworld alliance comprises eight major airlines across the Oneworld network of 850 destinations in nearly 160 countries. Offering 9,500 flights a day, generate US$120 billions in annual revenues. The alliance has around 15 percent of the world’s scheduled airline market.

SkyTeam is the newest alliance and is one of the world’s top three global airline alliances. It comprises of 19 airlines travelling around 1000 destinations, offering its 552 million annual passengers a worldwide system of 15,465 daily flights covering all major destinations. At present, it has only 19 percent of the world’s scheduled airline market.

Airports where airline companies have established an engineering base as a hub for its scheduled flights. Airport operators also charge fees for the usage of gates.