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When it comes to growth, air-air travels is probably a very large and growing industry. It promotes and facilitates tourism, economic growth, international investment and world trade. Hence, it plays a pivotal role in the globalisation of a number of industries (Headley & Bowen, 2015).
The total air travels in the US has grown by around 7% year on year in the past decade. Both business people and leisure travellers have grown. The availability of large carriers like Boing 747 has made it very affordable and convenient for leisure travellers to avail the airline services. The developing or emerging country governments realised the benefits of tourism. Hence, they started investing in infrastructure and resorts to lure tourists from developed countries like that of North America and European countries (Tyler, 2016).
If we focus on business travels, it has also grown a lot. The rapid growth in the globalisation and world trade has made the air-air travels very frequent. This has contributed to the growth in business travels.
In the current report, the main focus will be on the US airline business, and an attempt has been made to understand the industry and how it works. The overview of the US airline will be presented, followed by a competitor analysis of the different airlines present in the US. Porter’s five forces analysis will be used for the same. US airline industry economics is largely cyclical in nature. The reason for such a behaviour of the industry will be explored, and finally, some strategic recommendations will be made to help increase the airline’s profitability. The last part will contain a discussion section, where the general outlook and the future of the US airline industry will be discussed.
More than 100 certified passenger airlines are in operation in the airline industry of the United States. The 11 million-odd flight departures that take place from the US carries almost one-third of the total air traffic. The total revenues reported by the airline industry was over $200 million, with approximately 800,000 employees and 10,000 odd aircraft. The daily operation of 40,000 flights takes place (Tyler, 2016). An economic impact on the US airline industry, in turn, affects a large number of factors. These factors can be company profitability, airline employment, and the net worth of the industry. The ability to travel by air-air is one of the fastest means and helps in the growth of almost all other industries.
According to the latest report released by International Air Transport Association (IATA), US ranks fourth in the origin-destination passenger market, only next to China, Indonesia and India. There was a growth of 8 million new passengers or 1.7% of the total industry (PWC, 2013).