Airline Case analysis

Topics: Airline, Continental Airlines, United Airlines Pages: 6 (2078 words) Published: April 7, 2014

industry analysis: airlines

Airplanes were around in the early years of the 20th century, but flying was risky and not commonplace until 1925. This year, the Air Mail Act facilitated the development of the airline industry by allowing the postmaster to contract with private airlines to deliver mail. Soon after, the Air Commerce Act gave the Secretary of Commerce power to establish airways, certify aircrafts, license pilots, and issue and enforce air traffic regulations. The first commercial airlines included Pan American, Western Air Express and Ford Transport Service. Within 10 years, many modern-day airlines, such as United and American, had come on scene as major players. In 1938, the Civil Aeronautics Act established the Civil Aeronautics Board (CAB). This board served many purposes, the two most significant being determining airlines' routes of travel and regulating prices for passenger fares. The CAB based airfares on average costs. Because of this, airlines couldn't compete with each other by offering lower fares so they competed by striving to offer the best quality service. If the CAB found an airline's service quality was not up to par on a certain route, it would let other carriers begin operating on that same route. In this environment, established airlines enjoyed an advantage over start-up, because new carriers found it difficult to break into existing routes. The Federal Aviation Agency, now known as the Federal Aviation Administration, was created in 1958 to manage safety operations. Regulation / Deregulation

Alfred Kahn, an economist and deregulation advocate, became chairman of the CAB in the mid-1970s. Around the same time, a British airline began offering exceptionally inexpensive transatlantic flights, creating a desire for U.S.-based airlines to lower their fares. These influences led to Congress passing the Airline Deregulation Act of 1978, bringing in an era of free market competition. The CAB disbanded a few years thereafter. Post-deregulation, new carriers rushed into the market, and new routes directly connected cities previously accessible only via a string of layovers. Fares dropped as competition and the number of customers increased. Economy

The modern airplanes are larger, heavier, and faster and could go further than the designs put forth only 60 years prior. Going from a wooden frame running on a tractor engine and only being able to carry one or two people, to a metal body powered by multiple engines, to jet engines, to the wide-bodied, 100-300 passenger planes we commonly see today. The development of radar, incorporating electronic controls, large fuel capacities and leaps in the understanding of structure, environment and aerodynamics made it possible. The top 20 most produced and used commercial aircraft are the Boeing 747, Boeing 777, Boeing 737, Boeing 787, Boeing 757, Boeing 767, Boeing 727, Airbus A320, Boeing 707 and Airbus A380. In North America Boeings of different sizes are used most often. The Boeing 787 (Dreamliner) is made of special plastics, and has 20% lower carbon emissions and 20% more fuel efficiencies then planes of competing companies. An uprising current trend is the double-decker airplane, most notably the European Airbus planes and the American Boeing. The Airbus is currently beginning to become more popular due to its capacity; almost 600 passengers. Depending on the layout the Airbus can be equipped with shops, washrooms with showers and small bars and food stations. Aboard the airbusses produced today there can be up to 20 toilets and over 3000 feet of piping. In more luxuries Airbus models Jacuzzi tubs and First Class lounges are in the design. With 4 jet engines to propell this flying ship, the Airbus and its technology could revolutionize commericial airlines yet again. Going forward companies will be focusing on fuel effecitiency, carbon ommisions and capacity. In 2010 commericial airliners used 11 billion...
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