Essay on The Airline Industry

Essay on The Airline Industry

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The 2001terrorist attacks marked the beginning of the difficulties in the airline industry. The airline industry was and still is vulnerable to the economic, demographic, natural, technologic and politic environmental changes. Airline companies have several operational costs such as fuel, labor, landing fees, maintenance, and repair. We will focus on how the macro-environment of the forces mentioned above have impacted the supply and demand of fuel and the management of labor since these two types of cost alone represent more than 50 percent of a company’s expenses. (The Geography of Transport Systems)
The global economic environment plays an important role in terms of forecasting the future standing of the airline industry. If the good performance of air traffic impacts the economy, the opposite is also true. There are in fact distinct phases during which the real GDP growth and the growth of air traffic follow exactly the same variations. That was the case during the 2008 recession when GDP was low and the airline industry struggled. Because labor represents a significant portion of an airline operating costs, it is therefore usual to witness a significant amount of layoff by airline companies during a period of recession. The labor and Fuel cost are fixed cost which means that they do not vary depending on the number of customers per flight. Therefore, carrying more is an advantage for any companies since they depend on those revenues to make a profit. When there is less customers, the operating of all airlines companies remains the same. Southwest Airlines is one of the few companies that hasn’t struggle as much after 2001. Thanks to its marketing strategy, the company is one of the most successful airline companies in the US...


... middle of paper ...


... Southwest is considering adding flights to Cuba since the U.S government is about to lift restriction on travelling. (Long, 2015).
Southwest has become over the year the main leader in change in the airline industry and as a result is now the leader of the industry. The company has clearly stated that the key to its success is the management of its human resources and excellent management leadership. The company is aware of time and energy devoted to the hiring, training and retention of its employees and is committed to keep them satisfied.
Works Cited
Heather, Long. "Southwest Airlines Is Saving Billions on Fuel." CNNMoney. Cable News Network, 22 Jan. 2015. Web. 26 Sept. 2016.
Hofstra. "Global Studies and Geography." Hofstra University. N.p., n.d. Web. 26 Sept. 2016.
"The Rise of Southwest Airlines." Advance Business Consulting. N.p., n.d. Web. 24 Sept. 2016.


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