The United States airline industry includes roughly 600 companies with combined annual revenue of approximately 170 billion dollars (bts.gov). The major companies include American, Delta, and United Continental (bts.gov). There are air operations of express delivery companies such as FedEx and UPS. This industry is highly concentrated with the 10 largest companies accounting for more than 75 percent of industry revenue (bts.gov). The global airline industry generates about $500 billion annually (tbs.gov). The major international companies include Air China, Deutsche Lufthansa, Air France-KLM, Japan Airlines, and British Airways (bts.gov). Discussion Questions
1. Discuss the trends in the U.S. airline industry and how these trends might impact a company’s strategy. Trends in this industry are numerous. This discussion will include the price of jet fuel, on-time performance, security, and cheaper substitutes. Oil price volatility is the leading player in airline strategy (jetblue.com). Fuel is probably the most significant element in an airline’s base cost (jetblue.com). The new fuel price average for the year 2012 is around 129.7 dollars per barrel (jetblue.com). The impact of this year’s fuel bill for the global airline industry is upwards of 32 billion dollars (jetblue.com).
The causes for delays and cancellations of flights are reported monthly to The Bureau of transportation Statistics (bts.gov). On time performance has many factors; a few of these factors are air carrier delays, late arriving aircrafts, security delays, extreme weather, and equipment (bts.gov). Air carrier delays are within the airline’s control. This area includes maintenance/crew problems, aircraft cleaning, baggage loading, fueling, and such (bts.gov). A late arriving previous flight… Read Full Essay
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