Airlines Industry Profile

Companies in this industry provide scheduled domestic and international passenger transportation, as well as mail and freight transportation. Major US companies include American Airlines, Delta, FedEx, Southwest, and United Airlines; leading companies based outside the US include AIR FRANCE KLM MARTINAIR Cargo, China Southern Airlines (China), Emirates Group (Dubai), International Airlines Group (the UK), and Lufthansa Group (Germany).

The global airline industry generates only about $470 billion in 2021, according to Statista. Flights operated in 2022 are expected to reach about $33.8 million, according to the International Air Transport Association (IATA). Top regions for passenger growth include the emerging economies of North America, Asia/Pacific, Europe, the Middle East. Latin America, and Africa.

The US airline industry includes about 2,300 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $190 billion.

COMPETITIVE LANDSCAPE

Airline 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 regional routes.

The high capital requirements of the airline industry severely limit the number of participants. The US industry is concentrated: the four largest companies account for about 70% of industry revenue. ...