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Alrllne lndusLry Cvervlew

lramework
MarkeL
roducL
CusLomer
Compeuuon
Companles
Lconomlcs
8evenues
CosL
LxLernals
Clobal MarkeL
2000 Alrllnes operaung more Lhan 23,000
alrcra, provldlng servlce Lo over 3700 alrporLs.
ln 2006, Lhere were 28 mllllon scheduled lghL
deparLures and carrled over 2 bllllon passengers
CrowLh of world alr Lravel has averaged
approxlmaLely 3 per year over Lhe pasL 30 years
Annual growLh ln alr Lravel has been abouL Lwlce
Lhe annual growLh ln Cu
LxpecLed Lo double over nexL 10 - 13 years
uS MarkeL
100 cerucaLed passenger alrllnes operaLe over
11 mllllon lghL deparLures per year
Carry over one-Lhlrd of Lhe world's LoLal alr Lramc
743 mllllon passengers ln 2006
$160 bllllon ln LoLal revenues
343,000 employees and over 8,000 alrcra
operaung 31,000 lghLs per day
Commerclal avlauon conLrlbuLes 8 percenL of Lhe
uS Cross uomesuc roducL, accordlng Lo recenL
esumaLes
MarkeL
uS Commerclal
CosL - SafeLy - CrowLh
Consolldauon
ConunenLal - unlLed (2010) - LargesL Alrllne
uelLa - norLhwesL (2009) - 2nd
SouLhwesL - Alr1ran
roducLs
1he Cood, Lhe 8ad, and Lhe ugly
CLher
Adveruslng
AlrporL Calns
CredlL Cards?
(Cood) llrsL Class
LmlraLes rlvaLe 8oom
LmlraLes Shower
lees
lees (8ad)
8yanAlr (ugly)
CusLomer
8uslness
1lme
Amenlues
leasure
CosL
Low SwlLchlng CosL
no LoyalLy - Why mlles exlsL
Compeuuon
1937 - 1978: Clvll Aeronauucs 8oard regulaLes
Alr 1ravel as ubllc uullLy
1978 - resenL: Alrllne ueregulauon AcL
CosL per passenger ls 30 less ln 1990 vs. 1976
(accounung for lnauon)
9 alrllnes wenL bankrupL from 78 - 01, and
Amerlcan Loday
Low CosL Alrllnes
Pub & Spoke
Low CosL Alrllnes
Pub & Spoke
Compeuuon
CosL cumng Lo maxlmlze seaLs
roducL of hlgh xed vs. varlable cosL
Lxcess capaclLy due Lo compeuuon
Changlng wlLh recesslon
8arrlers Lo LnLry are less Lhan expecLed
SubsuLuLes are generally comparable ln cosL
1ralns, 8uses
Lxcepuon: L-Meeung
Companles
Consolldauon
Servlce
lmage
uavld neeleman
Lconomlcs (roLs)
Lconomlcs
8ankrupLcy
2001 - 2011
uS Alr
unlLed
uelLa
norLhwesL
Amerlcan
Amerlcan Alrllnes
lmprovemenLs
Addluon of lees
8aggage
lood
lnLerneL
CosL Cumng
lood
lllows
LxLernals
unlons
ay & 8eneLs
8egulauon
CovernmenL SupporL
WeaLher
1errorlsm
luel
luel
Pedge
Lmclency -
new 787
AlLernauves -vlrgln
blofuel

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