OVERVIEW
Catalyst
Summary
AIRLINE INDUSTRY STRUCTURE
Definition
Airlines can adopt several different business models
Legacy
Budget
Charter
Regional
Revenue streams
Passenger ticket sales
Surcharges
Cargo
B2B services
Major operating costs
Fuel
Employees
Maintenance
Aircraft
OPPORTUNITIES AND THREATS FOR AIRLINES
Opportunities
Rising personal incomes in emerging economies
Alliances offer network size economies
Freight volumes are increasing
Threats
Fuel prices are high and volatile
Price competition can be intense
Passenger switching costs are low
Hub airports are suffering from congestion
Air travel has a significant carbon footprint
Profitability is improving but still low
Middle Eastern carriers are challenging airlines in other regions
HOW ARE AIRLINES RESPONDING?
Delta Airlines
Emerging economies
Alliances
Freight
Fuel prices
Price competition
Passenger switching costs
Hub airport congestion
Air travel carbon footprint
Profitability
Middle Eastern carriers
Southwest Airlines
Emerging economies
Alliances
Freight
Fuel prices
Price competition
Passenger switching costs
Hub airport congestion
Air travel carbon footprint
Profitability
Middle Eastern carriers
China Southern Airline
Emerging economies
Alliances
Freight
Fuel prices
Price competition
Passenger switching costs
Hub airport congestion
Air travel carbon footprint
Profitability
Middle Eastern carriers
United Airlines
Emerging economies
Alliances
Freight
Fuel prices
Price competition
Passenger switching costs
Hub airport congestion
Air travel carbon footprint
Profitability
Middle Eastern carriers
American Airlines
Emerging economies
Alliances
Freight
Fuel prices
Price competition
Passenger switching costs
Hub airport congestion
Air travel carbon footprint
Profitability
Middle Eastern carriers
Ryanair
Emerging economies
Alliances
Freight
Fuel prices
Price competition
Passenger switching costs
Hub airport congestion
Air travel carbon footprint
Profitability
Middle Eastern carriers
China Eastern Airlines
Emerging economies
Alliances
Freight
Fuel prices
Price competition
Passenger switching costs
Hub airport congestion
Air travel carbon footprint
Profitability
Middle Eastern carriers
easyJet
Emerging economies
Alliances
Freight
Fuel prices
Price competition
Passenger switching costs
Hub airport congestion
Air travel carbon footprint
Profitability
Middle Eastern carriers
Lufthansa
Emerging economies
Alliances
Freight
Fuel prices
Price competition
Passenger switching costs
Hub airport congestion
Air travel carbon footprint
Profitability
Middle Eastern carriers
Air China
Emerging economies
Alliances
Freight
Fuel prices
Price competition
Passenger switching costs
Hub airport congestion
Air travel carbon footprint
Profitability
Middle Eastern carriers
COMPANY RANKINGS
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Diversity of revenues streams
Cost structure
Profitability
CONCLUSIONS
The major airlines are responding well to tough conditions
APPENDIX
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