The Airlines And The Airline Industry

First, the organization can deliberate on the procurement of other minor aircraft to strengthen its position in target markets to further conquer more market shares, e.g., it may invest or acquire local carriers and further upgrade their whole deal flights. As such, clients can select its subsidiary local auxiliaries or via utilization as reciprocal. The Dragonair is a fabulous example demonstrated by its actions. Accordingly, clients will be availed to possess the capacity to choose to agilely orchestrate their routes with Cathay Pacific Airways at all levels arranging from provincial to worldwide.

The terrorist attacks of September 11th caused many changes in our country. Although there were many after effects of the September 11th attacks, the airline industry was most impaired. This paper will explain two factors related to the airline industry that were most affected, the American people and the economy.

American airline industry is steadily growing at an extremely strong rate. This growth comes with a number economic and social advantage. This contributes a great deal to the international inventory. The US airline industry is a major economic aspect in both the outcome on other related industries like tourism and manufacturing of aircraft and its own terms of operation. The airline industry is receiving massive media attention unlike other industries through participating and making of government policies. As Hoffman and Bateson (2011) show the major competitors include Southwest Airlines, Delta Airline, and United Airline.

The Airline companies now a day are mainly depending on marketing to attract new customers and to maintain sustainable relationships with them by promotions, Rewards and Loyalty programs.

After six consecutive years of profitability, the U.S airline industry was descended into a downward spiral. The number of passengers flying dropped from 56 million in August 2001 to 30 million in September with no passengers for two days after the attacks (Poling). It took three years for the airlines to reach the 56 million passenger mark again. The impact on the travel industry, specifically the airlines, was more severe than in other areas.

Since the enormous breakthrough of aviation, early in the 20th century, commercial airlines have been playing the most part of our sky. One of the oldest, successful, and known airlines is the American Airlines. Today, this airline carries more fleet than any other airline in the entire world, which makes it solidly one of the biggest names in the aviation industry.

These are some of the strategies that “traditional” airlines use to eliminate the unnecessary costs and “frills”.

Since the merger of U.S. Airways and American Airlines, most people would now agree we are living in the age of airline oligopoly. Oligopolies form when there’s a state of restricted competition, and new companies cannot break into the industry for reasons like high-entry costs or government restrictions. This is the condition of the airline industry, today. In order to breach the oligopolistic nature of the airline industry, airlines must be able to break through high barriers to entry such as: retaining substantial capital requirements, having the need for technical and technological ingenuity and jurisdiction of patent rights. In addition, airplanes must be purchased, employees must be trained and facilities must be procured. Even after all these expenditures, some airlines still experience substantial financial losses. As a result, most of these airlines experiencing a financial hardship are subject to an airline merger. For this reason, the major airlines in the United States now consist of four competing large carriers: American Airlines, Delta Airlines, United Airlines and Southwest Airlines. These companies have survived the deregulation of the airline industry and sustained their places at the top of the industry. In an effort to stand out in an oligopolistic industry, airlines must experience: economy of scale, growth through merger, mutual dependence and price rigidity and non-price competition.

Bankruptcy is the new solvency for America’s legacy carriers in the past five years. Deregulation, terrorist events from September 9, 2011, and the recent recession are likely culprits but inefficient business practices share in the blame. The growth of low cost carriers helped to push airlines such as Delta and United to file for bankruptcy and enter mergers with other floundering legacy carriers. The latest bankruptcy announcement comes from American Airlines, the last of the legacy carriers to file for Chapter 11 protection (De La Merced, 2011). Heavy debt, inefficient aircraft, and high labor costs are forcing American Airlines to restructure just to compete. Profitable airlines are increasingly dependent on consumer fees, fewer routes, and sold out planes to maintain a positive cash flow.

3,4- The Airline industry and the market The airline industry is large, specially in the United States, mainly due to the “ Deregulation” of the industry. In 1938, the Civil Aeronautics Board was created to control the growth of the air transportation industry. This board had the authority to control entry, exit, prices and methods of competition. In the late 1970 this structure was found inefficient and in 1978 deregulation took place. Due to the deregulation of the industry competition intensified, prices dropped, and the number of people travelling increased. Many new companies emerged and regional airlines saw deregulation as an opportunity to expand. Due to the rise in competition, by 1986 mergers started to take place and in 1987 64.8% of the market was controlled by the four largest airlines. The demand for air travel is determined mainly by price, studies revealed that half of the leisure travellers and on quarter of business travellers did not have a preference for a particular airline, which means that prices determined the

The airline industry can be considered an imperfect oligopoly. There are several large carriers that dominate long distance flights, and many small carriers that compete for short distance flights. Competition is fierce, and the return for most carriers is very low. Some airlines are trying to differentiate themselves, like JetBlue for example, by offering superior services at low prices. Other low cost airlines, like Southwest, offer low costs with no frills. Most airlines offer a frequent flyer programs in order to develop brand loyalty. In recent years there has also been several alliances formed between airlines. These alliances enable

The airline industry is interpreted as being very unstable due to the immediate reaction to tragedies. The airline industry was affected following the September 11th tragedy and it affected other industries indirectly. The airline industry plays a key role in

One of the world’s most competitive and prominent industries is the airlines industry. It generates huge amounts of income as well as employment each year. Some of the common names in US air travel service providers are Alaska, Northwest, Southwest, US airways, American etc.

No-frills airlines usually focus on low-cost strategies in every aspect of their business. The low-cost strategies can be implemented by applying various factors, such as using one type of airplane, using secondary airports with short flights, point-to-point transit with simplified routes, speedy turnaround times and assigning multiple roles to staff in order to reduce the labor cost. These types of strategies let you play a win-win situation because once the cost is reduced; it benefits the passengers as well as the company itself. But in real time, it is not necessary that every low-cost carrier airline will apply all the above mentioned strategies, still they can achieve better results due

Being one of the top airline industry for almost half a decade, Kingfisher airline went into bankruptcy recently. Unstable top management coupled with some bad decisions hampered the growth of kingfisher Airlines. Constant change in the management, sudden shift from economy segment to luxury segment, a decision to buy Air Deccan even though Kingfisher was not making enough profits, lack of strategic decision from top management to tackle the soaring fuel prices tied with some other unhealthy decisions made them to face the contraction portion of business cycle. Kingfisher Airlines did not recover well from that stage and at the certain time even government denied to bailout kingfisher from bankruptcy, management staff went on indefinite strike because of the unpaid salaries, as time passed by customers started to lose trust and there were no hopes for kingfisher other than shutting down.