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Industry Overview Of The Airline Industry

1562 words - 6 pages

Surviving all odds could be considered a slogan for the U.S. Airlines Industry.Through inflation, depression, terrorist activity and much more the Airline Industry has taken several set backs and still managed to survive. While profits have fluctuate a great deal, the U.S. Airline Industry can be characterized by it steady growth, falling prices and overall stability and contribute a great deal to this economic system. In a brief study of the U.S. Airlines as viewed though certain economic indicators should prove the resilience of this industry. Much like any other business the success and failure are dependant largely on the economic it which operates in. To discuss the impact of the Airlines and macro economics one might look at the background and a few economic indicators.Certainly in 1903, when the Wright brothers first success flight in Kitty Hawk, North Carolina they had no idea this would mark the beginning of the aviation industry.(www.scriptorium.lib.duke.edu, July 31, 2005). The public was not ready of airplane travel just yet. The development of the Airline industry could be credited to World War I. After the war, the government stopped funding research and development. Once Charles Lindberg successfully completed a solo flight across the Atlantic Ocean this created a huge interest in flying. Then a variety of air transportation holding companies were formed. One major holding company that is still world recognized, Boeing form its air transportation division in 1928. On big factor that contributed to the growth of this industry was the development of transport mail by the U.S. Postal Service.In 1926 the Air Commerce Act was passed, allowing Federal relation of air traffic. In 1938 Civil Aeronautics Authority was developed. (www.scriptorium.lib.duke.edu, July 31, 2005) That same year the DC-3 was created to carry both passengers and mail. The 1950's planes wereimproved for comfort and commercial flights. 1958 the Federal Aviation Act was passed, and the Federal Aviation Administration developed an air traffic control system. 1970's fuel prices increases dramatically, the 80's saw deregulations, and the 90's saw a dramatic increase in the number of passengers. And of course 2000's can be characterized by the events of September 11, 2001. The history of the airlines gives reference to it strengths, weakness, opportunities, treats and it trends.The number one strength of airlines industry would be travel time. Air travel made it possible for travelers to reach place in record times. Other strength could be considered to be competition, international travel, and federal subsidies. The number one strength mostly popular with customers are the fare wars. Air fare wars are where competitors all reduce the price of air line tickets based on their competitors' prices. The flip side to it strengths would be the airlines weaknesses or vulnerabilities.The number one weakness as proved by September 11th would be security, and terrorist treats....

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