Trends and developments in the airline industry

The Airline industry is a large and constantly growing industry. It facilitates economic growth, international investment and world trade and is therefore central to other industries as well for globalisation. There are various forces which lead to globalisation in airline industry. Key drivers of change are forces likely to affect the structure of an industry; sector or market. (1).

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.

1. There are a few trends in the US airline industry. One is consolidation, wherein existing players merge in an attempt to lower their costs and generate operating synergies. The most recent major merger was the United Continental merger, which is still an ongoing affair, but has created the largest airline in the United States by market share (Martin, 2012). Another trend is towards low-cost carriers. In the US, Southwest has been a long-running success and JetBlue a strong new competitor, but in other countries this business model has proven exceptionally successful. The third major trend is the upward trend in jet fuel prices, and the increasing importance that this puts on hedging fuel prices and capacity management (Hinton, 2011).

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 company's internal strategies stand in response to the conditions of the external environment. The airline industry in the United States is a difficult one in which to operate. Fixed costs associated with

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 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

Economy airlines suffer during down economies and reduce their orders, and the industry has become dependent on the Middle East and Asia in recent years to offset this (Crooks & Weitzman, 2010).

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.

Fluctuations in the value of foreign currency impose a direct cost on foreign airlines as crude oil is purchased in accordance with the US dollar to which it is pegged. Airline companies in North America, which are associated with the SPDR S&P Transportation ETF, benefit from the fact that crude oil prices are denominated in U.S. dollars; as opposed to airlines from other regions that are susceptible to fluctuations in the exchange rate as well as the overall price of crude oil per barrel. For example, Brazilian airline Gol Linhas Aéreas Inteligentes’s fuel costs accounted for 42% of its operating costs, in comparison to its US rivals such as American Airlines and Delta Airlines. (IATA, 2015)

The Domestic Airlines industry is affected by key external drivers, such as corporate profit, world price of crude oil, per capita disposable income, inbound trips

After 9/11 many airline companies will be facing a financial crisis that will shape America banks, stock pricing and insurance company’s community. Airline industry after 9/11, will make many changes to foreign policy and national policy, “the hardest hit business was the airline industry, which suffered major economic damage” (to, H. and Lee, D. (2005). I choose this topic because many Americans really don’t know how 9/11 crippled airline industry. The terrorist attack on September 11, 2001 was a turning point in American history, which killed over 2,000 people and which put fear in many businesses and people, “the terrorist attacks created a great deal of uncertainly for the industry” (Frey, B.S., Luechinger, S. and Stutzer, A. (2007)). 9/11 will show how a nation that pays no attention to the safely regulation of airline industry into something that will haunt America decade after the attack. This research paper will benefit to many business entrepreneurs to serve as a reference tool in the areas of business management, and macroeconomics. This topic can best serve as a good tool for other researcher’s on the subject of banking and finance. This paper will analyze the importance and will point out how 9/11 impact America airline industry.

Malaysian airline industry companies disclosed at the just-concluded International Air Transport Association 's (IATA) 64th annual general meeting that they would cut capacity, impose fuel surcharge and fee on extra suitcases, embark on non-fuel cost-cutting measures and increase fares (Bernama.com, 2008). Since fuel price had increase, airline industry companies’ profit margins have been dampened by soaring oil prices, global economic uncertainties and weaker travel demand. Malaysia earns seven percent of GDP from tourism and stands to lose around $1 billion. Airline bookings were down 40 percent by the end of April (International Herald Tribune).

• Substitutes such as Indian railway and road transport can be used if flight fare increases