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Airline Industry

Airline Industry

“It’s a dire situation,” “says Joe Leonard, chief executive of low-fare carrier Air Tran Airways, who is scheduled to testify”.   “I’ve never seen anything like it”.  This excerpt comes from an article written by Martha Brannigan, which sums up the hostile economic environment that airline carriers play in .  Playing is just what the majority of the airlines are doing.  However at the other end of the table sit such sound companies as Jet Blue and Southwest.  The mere existence of such company’s proves that airline carriers can be viable business entities.  I aim to prove that troubled airlines such as United Airlines and US Airways can see brighter skies in the future, by minimizing costs and maximizing revenues.  Nevertheless lowering costs and raising revenues cannot effectively fix the struggling airlines problems if the airlines are not able to operate in a free market environment. 
The airline industry is a service industry.  The airlines are in the business of transporting people and their belongings as well as products.  The major characteristics of the industry include the following:  capital intensive, high cash flows, labor intensive, highly unionized, seasonal.  These

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