The International Air Transport Association

In recent years the Airline Industry in Europe has experienced good levels of growth. Despite instances of deceleration the market is forecasted to remain stable producing moderate growth through to the end of the forecast period in 2018. According to a report issued by MarketLine in 2014 the European Airlines industry had total revenues of $180,945.8m in 2013, which represented a compound annual growth rate

Rising fuel prices has a huge impact on the airline industry. In an article published by the New York Times in 2007, oil prices were hovering ‘near $100 a barrel’ which caused the International Air Transport Association (IATA) to ‘slash’ their predicted profits for 2008 from ‘$7.8 billion to $5 billion’ (Clark, 2007). In 2008 high fuel prices were ‘dominant factor’ in the losses that faced the industry, and continued to same effect in 2009 (Dunn, 2009). Diagram 2 shows how fuel price has increased and fallen over the last 5 years.

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 industry has been divided into labor unions which include several types of unions such as the Flight Attendants' Unions, the Machinists' Unions, and the Pilots' Unions. The majority of the employees are part of such unions which has led to an increase in labor costs for the entire airline industry. TECHNOLOGICAL FACTORS Fuel efficiency is increasing. Aircrafts that are more fuel efficient are being developed and the engines are being redesigned to cater to this change.

According to a Bomey (2015), “to give you an idea of how volatile it is, a 1-cent change in the cost of a gallon of jet fuel on an annual basis is $40 million for Delta. So when there's a swing of $8 or $10, translated into cents per gallon it's hundreds of millions of dollars”( para. 8). Furthermore, in Delta’s case, to offset such volatility fuel pricing is locked in quarterly. Unfortunately, considering fuel pricing is significantly lower when compared to years past, airline ticket pricing remains the same based on other

The airline industry is greatly influenced by the the travel and tourism trends across the globe. The World Travel and Tourism Board states that the the level of tourism is likely to grow even as the years progress. The growth in the level of tourism is expected to grow at a level of 4.5 per cent annually. This is expected to continue upto 2017. Thus the organization should fully prepare it self and take over the tourism market.

of public passenger intercity travel. The outlook for the airline industry is good and continued growth is likely.

Following the Deregulation in 1978, a competitive price war ensued among the airline industry as a direct result of the new freedom for airlines to set their own fares as well as route entry and exits. This gave rise to the operating structure of the airlines as it exists today, consisting of the point-to-point system and the hub and spoke system. With this came the change of focus for major airlines to non-stop, cross-country routes in densely populated cities, which, in a regulated environment, would be profitable. This resulted in the obvious outcome of increased competition, thus lowering the average industry prices for non-stop cross country routes which were profitable. This caused operating costs to

Airlines must operate within a low-margin, high-fixed-cost environment, making profitability particularly sensitive to decreases in volume, either from environmental factors (e.g., the September 11,2001 attacks) or from competition. Moreover, the airline business is labor-intensive. Labor costs as a percentage of revenues ranges from a low of about 25 percent for the low-fare airlines to almost 50

The airline industry has always been a fiercely competitive sector. Since the invention of low-cost carriers, also known as no-frills or

Airlines Industry is large and growing, it is also the most fiercely competitive sector. It facilitates international trade, world economy growth, tourism and international investment. The airline industry has over time with the use of modern technology been able to take advantage of the short haul, high frequency and gained a competitive advantage over other forms of travel, such as buses and railroad travel. Additionally, the airline industry still holds the market for global travel at a low cost and convenient way to travel. The aviation industry gives a good contribution to the GDP which includes the following: airline services, general aviation, civil airport operations, aircraft manufacturing, and

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 has experienced continual problems with rising costs with both fuel and maintenance which has caused them to increase their fees to the consumers to pay for those rising costs. This paper will help explain what an airline such as Delta does to help alleviate such costs without forcing its consumers to flip the bill through high fees that consist of tickets, baggage fees and food. The costs of doing business in aviation today have spiraled out of control making it very expensive for both airlines and the

The growth of airline industry in any country is directly proportional to its GDP growth; the greater the business activity, the more air travel and the higher the GDP of the country. The demand

The sweeping changes which have occurred within the airline industry have meant that airlines, more than ever before, are trying to control their costs in order to improve their financial position in an ever increasing competitive and deregulated environment. At the same time, carriers have been facing unprecedented increases in the price of fuel over which they have had very little control. All this is having an impact on the aeronautical policies of