The Airline Industry

In: Business and Management

Submitted By methodology
Words 5166
Pages 21

The Airline Industry

Table of contents
Abstract 3
Introduction: 4
Products and services: 4
Organization: 4
Major players in the airline industry: 5
Economic impact of the airline industry: 8
Employment within the industry: 9
Key trends in the airline industry: 9 - Economic forces: 9 - Technological forces: 11 - Socio-cultural forces and political-legal forces / Government Regulations 13
Logistics and supply chain factors 14
Porter’s Five Forces Analysis: 16
Strategies used by airlines: 17
Expected Entrants: 18
Conclusion and Recommendations: 18
List of Abbreviations 20
Appendix: 20
References 21


The US airline industry is one of the key sectors of the country’s economy. Employing over ten million people, it contributes up to half a trillion dollars in annual revenues (about 5% of the US GDP). In recent years, the industry has been faced with major challenges arising from its external environment. Some of these include rising fuel prices and the global economic recession. As a result, growth in the industry has significantly slowed down with the ATA estimating that by the end of 2008 the industry had lost between $9 and $24 billion. With high intensity of industry rivalry, high supplier bargaining power, low threat from new entrants, low threat of substitution, and low buyer bargaining power; the industry’s attractiveness can be described as moderate. To be successful, players in the industry must exploit the opportunities offered by the external environment while overcoming the threats extant in that environment. To do so, they must adopt the following measures, which must also be in line with their internal strengths: cost reduction initiatives, product innovation and value addition to their service, upgrade their fleet to newer generation aircraft…...

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