Airline Industry

This paper briefly described what the airline industry included and the environment of the competitive market. Air transport has been a big industry. And the airline industry is consistent developing. After the crisis, although the airline industry has been hit , the industry is also one of the vital industries.

The industry is facing the deman problem. When facing a growth in demand, airlines tend to respond more by means of increasing frequencies than by increasing aircraft size(Moshe Givoni, Piet Rietveld). It is cheap in short term, but not this cannot solve the problem. There are 22.45 million passengers carried in 2009 (twitterCounter ). The civil aviation industry to the global economy has been estimated to be US$3560 billion.

The lack of deman is a bad news for the industry. However, as the economic recovery, the market will come back to the common level. The industry grew by 5.6% in 2007 to reach a volume of 2,076 million passengers. In 2012 the industry is forecast to have a volume of 2,362 million passengers, an increase of 13.7% since 2007.

Airline industry is a complex industry and gathers numerous big companies. The airline industry divides into two parts: commercial aviation and military aviation. The manufacture of the planes needs amount of money and time. The industry also contains production and repair. Just the factories of the elements of the plane are from all over the world. The airlines provide service to the consumers. The guys who always take a plane are the businessmen, travelers and foreigners.

The shares of the airlines rose 28% in 2010(2011 IATA). As the global economic recovery, the finance of the airlines performed excellently. The situation of the airlines may continue to be better. There will more than 1400 airplanes be came into use.

The civil aviation industry is a Competitive market. The top ten airlines are the Asiana Airlines, Singapore Airlines, Qatar Airways, Cathay Pacific, Air New Zealand, Etihad Airways, Qantas Airways, Emirates, Thai Airways, Malaysia Airlines.

The Star Alliance occupied about 28% of the whole market, the SkyTeam took up 24%, the Oneworld had 18% and others were 30% (Heracleous, Wirtz, and Pangarkar, 2009, p. 22). In 2012, the global airline industry profit expectations to $ 4.1 billion. And they forecast the data will be better. As the airway companies growing up, the companies of china may paly a more important job in the world stage.

Apart from differences in current size and recent growth among carriers, the basic structure of the airline industry experienced important changes in recent years with the creation of Low Cost Carriers (LCCs). This part of the industry emerged with market deregulation and seems mature in the US and Europe, growing in South East Asia and India, though is less prominent in China and Latin America.

One point in describing an air service is to consider the airlines involved. Analyses of the airline industry ( [Vasigh et al., 2008], [Hanlon, 2007], [Rhoades et al., 2008] and [Bowen, 2010]) suggest the complex economics of airline operation are likely to be felt in different outcomes in different cities. This can be seen via differences in the corporate structure of the airlines(O’Connora, Kurt Fuellhartb).

The service which the airlines provided is related to the operation of the whole company. The size of the airlines serving a city depend on their association in alliances or not. Alliances have developed as a way of allowing airline collaboration outside of commercial arrangements, which in many cases are still subject to national regulatory restrictions.

Reference:

Heracleous, Wirtz, and Pangarkar, (2009), Flying High in a Competitive Industry: Secrets of the World's Leading Airline p. 22 Mcgraw-Hill

Moshe Givoni, , Piet Rietveld (2009) Airline’s choice of aircraft size – Explanations and implications

O’Connora, Kurt Fuellhartb (2012)Cities and air services: the influence of the airline industry journal homepage: www.elsevier.com/locate/jtrangeo

http://news.ifeng.com/mil/air/hkxw/detail_2011_01/13/4263570_0.shtml

Airline Industry Research

Shipeng.Li

11040644

November 2012