Economic profile the airline industry essay

However, in recent years a confluence of events has led to a decrease in profitability for companies within the airline industry. The purpose of the research was to examine the ways in which government interventions in the airline industry have led to the demise of the industry. The research found that before deregulation the Civil Aeronautics Board was responsible for the management of the routes that airlines flew and the price for airline tickets.

Economic profile the airline industry essay

This is a unique opportunity to invest in a new concept in the aviation industry which offers attractive returns and a clear exit strategy in the public markets within 3 to 5 years. By continuously focusing on the needs of the premium-class business traveller, SkyTrails will provide the best value proposition in the markets it serves.

Overview SkyTrails is the project name for a new airline company that will focus on single class long-haul scheduled flights. SkyTrails will capitalise on the widening gap in long-haul travel between business and economy class. SkyTrails will operate Boeing aircraft configured with 80 seats which will provide a very spacious and pleasant environment.

The aircraft will be equipped with the latest technology in order to enable the business traveller to use his time efficiently while travelling.

The company will start by leasing two aircraft and expand its fleet to 6 aircraft by the second year of operation. It will offer customers a compelling value proposition: In addition to an attractive price, SkyTrails will offer passengers considerable time savings, convenience, and will focus on creating a lifestyle appeal.

The business model contemplated enables the company to reach a break-even point with 40 passengers per flight 50 percent load factor which significantly reduces the risks associated with typical airlines that need a greater number of passengers to break-even. In many ways, the SkyTrails model replicates the benefits of the very successful regional jet model on a long-haul basis.

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Inover 2. Given that no airline currently serves the North Atlantic route from Stansted, SkyTrails will be uniquely positioned to take advantage of the unserved demand that exists.

Economic profile the airline industry essay

Stansted is the fastest growing airport in Europe with 9. It is the hub of low cost airlines Go Fly, Ryanair, and Buzz, all of which are experiencing tremendous growth and an increase in business travellers.

They claim that as many as 40 percent of their passengers are travelling on business. SkyTrails has already obtained landing and takeoff slots at Stansted and JFK airports for its initial flights.

Total traffic from U. With a break-even point of 40 passengers per flight, SkyTrails will also be able to target medium and low density routes offering an enormous potential for growth and an important competitive advantage.

By targeting such a dense route, SkyTrails initial market share will not be significant enough to be considered as a threat by the major transatlantic carriers. Existing players will only be able to react with price which is only one aspect of the SkyTrails concept and by no means the most important.

Management and Culture SkyTrails has hired experienced airline professionals in order to ensure the operations are well managed.

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Blending experienced airline professionals with a young creative management team will be a successful combination which will continuously look for innovation while maintaining a high level of professionalism.

Getting the right combination will be key in executing this venture successfully. The company will also focus on building a strong corporate culture that will help to differentiate itself from the competition and sustain a high level of motivation while maintaining cost control.

More than just an airline, a lifestyle SkyTrails will differentiate itself as much as possible from the traditional airlines.

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Passengers flying on SkyTrails will identify to a lifestyle. SkyTrails has hired industrial designer Ric Sloan to work on the interior of the aircraft. Superior Product and Service With an passenger configuration, the cabin of the Boeing will look more like a private jet than like a large mass transportation aircraft.

Boarding and disembarking will be much faster given the low number of passengers. SkyTrails will reduce the overall travelling time by at least 1 hour and 30 minutes for passengers flying to and from the city of London, Canary Wharf, and the fast growing Cambridge area.

Providing a personalized and comfortable experience is key in retaining customers and getting repeat business. A strong emphasis will be placed on this aspect of the business: SkyTrails will continuously innovate and have the ability to introduce new products to market in a shorter timeframe than its competitors.

Strong Sales team SkyTrails will market its services to companies directly. Its ability to acquire corporate clients will be extremely important to the success of the venture.

SkyTrails will offer discounts for volume travel and will also partner with select hotels in order to offer all-in packages. Low Cost Operation As a new airline, SkyTrails will have a significant cost advantage over the existing airlines that have large overhead expenses.

By focusing on a single type of aircraft, a single class of travel, and initially a single route, systems will be simple and costs will be kept to a minimum. · The U.S. airline industry is both dynamic and innovative.


Faced with persistently high jet fuel costs, the industry continues to restructure and streamline operations in The total economic impact of an industry is a summation.

of primary impacts and induced impacts of spending Economic rent is an important theory and concept in the airline industry as it identifies relevant factors of production and amount of resource that must be invested in production.

Airline industry has a number of production dynamics whose costs must be received in order to sustain the busi  · Previously, industry prediction predicted that the economy would encounter a loss of billion because assumption made that in and which was during the year of economic downturn, there was a loss of billion and 16 billion Airline Reservation System Chapter 1 Introduction In today’s airline industry users or customers can reserve seat or book flight from any place in the world as long as they are connected to  · Airline Economic Analysis Share In recent years, the airline industry in the United States produced improved balance sheets, increased valuations, and generated 13 consecutive quarters of profitability with operating margins near or above 10% — all testament to the quality and discipline of the management of this hyper-competitive /jan/airline-economic-analysishtml.

· Also, the airline industry as a whole is vulnerable to economic cycles and big swings in bottom-line performance. If the consumers do not have the money to spend due to an economic slow down, airlines take a major hit in filling 8 Southwest Progress.

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