|Last Quarterly Update:||6/10/2013|
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Companies in this industry provide scheduled domestic and international passenger transportation, as well as mail and freight transportation. Major US companies include American (owned by AMR), Delta, and United Continental, as well as the air operations of express delivery companies such as FedEx and UPS; outside the US, leading companies include Air France-KLM, Deutsche Lufthansa, Japan Airlines, and Quantas (Australia).
Worldwide, the airline industry generates about $640 billion in revenue annually. The number of air travelers is expected to grow nearly 30 percent to some 3.6 billion by 2016, while cargo volume is forecast to reach nearly 35 million tonnes by 2016, according to the International Air Transport Association. Top regions for passenger growth include the emerging economies of Asia/Pacific, Latin America, and the Middle East.
The US airline industry includes about 600 companies with combined annual revenue of about $175 billion and is expected to grow at a moderate rate in the next two years. Key growth drivers include business and leisure travel spending.
Demand depends highly on the health of the economy, which affects spending on business and leisure air travel. Because many costs are fixed, the profitability of individual companies is determined by efficient operations and on favorable fuel and labor costs. Large companies enjoy economies of scale in purchasing and the ability to provide more extensive services. Small airlines can compete by serving local or ...
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