Characteristics Of An Airline Industry - 1071 Words

Delta Inc. - Characteristics of An Industry â€Å"Delta Air Lines is one of the world s largest airline carriers in the world. Through its regional carriers, the company serves about 330 destinations in about 60 countries, and it operates a mainline fleet of 800-plus aircraft, as well as maintenance, repair, overhaul, and cargo operations† (Hoover’s Inc., 2017). When analyzing the airline industry, it is important to look at the dominant economic features of that industry. The air line industry is considerably large and has reached its’ maturity stage; it is not really growing or declining. There are many independent companies within the industry and some are bigger than others; such as Delta, American Airlines and United, but even smaller†¦show more content†¦Because the airline industry requires a lot of money and other financial resources to provide its’ type of service, it is very capital intensive. Because of Delta Inc.’s capital-intensive nature and fixed costs, barriers to ent ry are low. According to the IATA (International Air Transport Association), about 1,300 new airlines were established in the last 40 years (Cederholm, 2014). Capital is not the only reason there are low entries into the industry: sophisticated knowledge and skill sets can be a challenge when trying to fill positions, and there are many federal and government regulations and laws that must be adhered to which can be a deterrent during initial start-up. Market Share. The passenger air transportation market is a thriving industry, taking individuals to locations around the globe. In 2015, Delta Air Lines was the largest airline in the world based on sales, reaching more than 40 billion U.S. dollars in sales revenue. In 2016 Delta Inc. had a big fall in earnings. Increased costs from a new pilot contract drove the bulk of the year-over-year decline, with a decrease in unit revenue doing the rest of the damage. Conversely, â€Å"Delta expects passenger revenue per available seat mile (PRASM) to return to growth in Q1 for the first time in more than two years. If unit revenue remains on its upward trajectory this year, the company could return to margin expansion by the second half of 2017† (Levine-Weinberg, 2017). Strengthening passengerShow MoreRelatedPorters Five Forces - the Airline Industry1238 Words   |  5 PagesAbstract In this paper I will be analyzing the airline industry using Porter’s Five Forces. Porter’s Five Forces is a business management tool that allows firms to possess a clearer perception of the forces that shape the competitive environment of an industry, and to better understand what these forces indicate about profitability with regard to the microenvironment. 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Industry structure is (fairly) stable. [pic] Case: Airline Industry †¦. Porter’s 5 forces – purpose: Identifying the different