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INDUSTRY ANALYSIS A Basic Description of the Airline Industry Industry - The nature of the service The Airline Industry is a service industry but due to all the equipment and facilities involved in transportation it is easy to lose sight of that fact Airlines perform a service for their customers-transporting them and their belongings or their products in the case of cargo customers from one given point to another for an agreed price The objective is to provide a service at a price that people are willing to pay and to keep costs below that price so that a profit can be made Industry - Information about Customers and Channels of Distribution There are several types of airlines defined by the type of service they offer annual revenues and the type of aircraft they use All federal safety requirements are pegged to aircraft size Major Airlines earning revenues of 1 billion or more annually in scheduled service They generally provide nationwide and in some cases worldwide service There were 12 major US airlines in 1997 Delta United American US Airways Southwest Northwest Continental Trans World American West Alaska Simmons and Reno National carriers are scheduled airlines with annual revenues between 100 million and 1 billion Many of the airlines in this category serve particular regions of the country although some provide long-haul and even international trade Regionals as their name implies are airlines whose service is limited to a single region of the country transporting travelers between the major cities of their region and smaller surrounding communities Industry - Size of the Industry With greater competition on the vast majority of routes extensive discounting and more available flights air travel has grown rapidly since deregulation recessionary periods excluded In 1977 the last full year of government regulation of the airline industry US airlines carried 240 million passengers By 1993 they were carrying nearly 490 million A Gallup survey that
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