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 U.S. airlines in 1997:
Delta, United, American U.S. 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.
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, U.S. airlines carried 240 million passengers. By 1993 they we...