Chapter 1 - The Airline Industry - Trends Challenges and Strategies.pptx

This preview shows page 1 - 11 out of 42 pages.

THE CITY UNIVERSITY OF NEW YORK YORK COLLEGE BUS230 Introduction to Aviation Business Chapter 1 – The Airline Industry: Trends Challenges & Strategies Prof. M. Brienza
Image of page 1

Subscribe to view the full document.

Chapter 1 – The Airline Industry: Trends Challenges & Strategies Top 5 U.S. Airlines American Delta JetBlue Southwest United
Image of page 2
Chapter 1 – The Airline Industry: Trends Challenges & Strategies INTRODUCTION – Background on current global airline industry Regional Analysis New Breed of airlines Since deregulation, about 200 new airlines were started in the U.S. and Canada, but only a handful survive: Allegiant, (the new ) Frontier, JetBlue, Porter, Spirit, Sun Country, WestJet, and Virgin America. California Pacific, People Express, Avatar airlines, Eastern Airlines, Baltia Airlines, LasVegas Air, American West Jets, Pan American Airways, Airline 4.0, Why airlines fail
Image of page 3

Subscribe to view the full document.

Chapter 1 – The Airline Industry: Trends Challenges & Strategies It’s one of the most enduring folk wisdom dicta in all of commerce. “The airline industry, in its history, has never made money.” Until 1930 or so, flight was mostly a way to drop insecticide or deliver mail. At first, it didn't make economic sense to ship people. Technological advancement, especially in the areas of speed and airliner capacity, created so much demand that passenger travel was eventually seen as nearly a public utility – something to be preserved and maintained through down periods, even at taxpayer expense if necessary.
Image of page 4
Chapter 1 – The Airline Industry: Trends Challenges & Strategies The landmark event in U.S. commercial aviation history – as important as the incorporation of sound was to motion pictures, or the forward pass was to football – was the Airline Deregulation Act of 1978.
Image of page 5

Subscribe to view the full document.

Chapter 1 – The Airline Industry: Trends Challenges & Strategies
Image of page 6
Chapter 1 – The Airline Industry: Trends Challenges & Strategies Prior to its passage, the federal government set rates, fares and schedules, guaranteeing profitability to each oligopolistic airline but doing its best to thwart innovation. Since the act’s passage, prices have dropped about 40% and ridership has increased dramatically.
Image of page 7

Subscribe to view the full document.

Chapter 1 – The Airline Industry: Trends Challenges & Strategies When airlines became subject to competition, the industry necessarily underwent transition. Some airlines folded (Pan Am, Eastern), others were subsumed by larger competitors (TWA, Piedmont), and still others advanced from regional or nonexistent into positions of national importance Like Southwest and JetBlue
Image of page 8
Chapter 1 – The Airline Industry: Trends Challenges & Strategies Bankruptcies have become a way of life for the older carriers in the U.S. aviation industry, every major one having to reorganize in recent years. And yes, it’s true that large- carrier losses have more than offset newer- carrier profits in recent years.
Image of page 9

Subscribe to view the full document.

Chapter 1 – The Airline Industry: Trends Challenges & Strategies Stage I: Regulation Airline heavily regulated by the government
Image of page 10
Image of page 11
  • Fall '19
  • Low-cost carrier, Background

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask 0 bonus questions You can ask 0 questions (0 expire soon) You can ask 0 questions (will expire )
Answers in as fast as 15 minutes