Delta Air Lines Inc

After the merger, American Airlines became the world’s leading airline in terms of fleet size, network, and finances. American Airlines stock has risen more than 270% since 2011.

The fleet of railroads includes railcars and locomotives. In this part, we’ll compare the average locomotive fleet age of US Class I railroads.

The EV-to-forward EBITDA ratio denotes how a railroad is valued for each dollar of EBITDA that it’s anticipated to earn.

Recently, United Parcel Service has broadened the service offering of UPS My Choice to 15 more countries and territories in the Americas and Europe.

UPS’s US Domestic Package segment consists of the time-sensitive delivery of letters, documents, and packages across the US. As the jewel in the company’s crown, this segment’s share averaged 61.1% of the total revenues in the last six years.

In 2015, United Parcel Service reported total revenues of $58.4 billion. The company’s primary competitor in the US is the Memphis-headquartered FedEx Corporation.

FedEx provides a portfolio of transportation, e-commerce, and business services through wholly owned subsidiaries.

In February 2016, the airline capacity of the eight major airlines exceeded their traffic growth by an average of 2%.

Spirit Airlines has historically followed a low-cost structure, and took numerous measures to keep its cost components the lowest in the industry.

For 1Q16, Delta Air Lines (DAL) expects to see its operating margins improve to 18%–20%, backed by solid cost savings and lower fuel prices.

The airline industry has contributed to the globalization of the world economy. It connects buyers and sellers. It also transports goods across nations. It breaks the barrier of distance and time. The industry’s future looks bright. Travel expenditure in the U.S. is expected to grow by 4.3% in 2014 and 5.1% in 2015.

For the seventh consecutive year, Alaska Airlines held the top spot in Customer Satisfaction among the Traditional Network Carriers survey conducted by J.D. Power.

Wide-body aircraft fly transoceanic routes, can accommodate 200–500 passengers, and often transport commercial cargo across the globe.

When Boeing bought McDonnell Douglas in 1996, the acquisition helped Boeing overtake Lockheed Martin as the largest defense contractor.

The airline industry is widely impacted by regulations and restrictions related to international trade, tax policy, and competition. It’s also impacted by issues like war, terrorism, and the outbreak of diseases—such as Ebola. These issues are political. As a result, they require government intervention.

Rising costs impacted China Eastern’s (CEA) operating margins, which declined from 5% in FY09 to 1.8% in FY13.

More than half of China Southern’s total operating expenses in FY13 were related to flight operating expenses.

Revenue from JetBlues’ Even More Space grew at a five-year compounded annual growth rate of ~30% from $45 million in fiscal year 2008 to $170 million in fiscal year 2013.

Although trucking is the most widely used mode of transportation, the fastest growing mode of transport is by air.

Using a single aircraft type reduces disruption of operations due to maintenance efficiencies. The airline reduces training costs with standardized pilot training and maintenance routines.

Gol’s operating income turned positive in FY13 after reporting losses for two consecutive years.

SARS was another disease outbreak in 2003. SARS caused a panic similar to the current Ebola outbreak. SARS was a viral respiratory illness.

According to IATA (or the International Air Transport Association), the global airline industry passenger volume and capacity increased by 5.3% year-over-year in July 2014. Freight volume increased by 5.8%. In July load factor (or capacity utilization) for passengers was 82.3%, and for freight, it was 44.4%.

The second largest cost component for airlines is salaries, wages, and benefits. Employment in the U.S. airline industry has increased in the last couple of years when the U.S. economy recovered from the recession and demand for air travel picked up.

Yield is the average fare per passenger per mile. Passenger revenue is calculated by multiplying RPM (or revenue passenger miles) with yield. Yield varies based on demand and supply factors. Since demand for air travel is seasonal, yield is higher during peak seasons.

Load factor is a measure of capacity utilization. It indicates the percentage of total capacity that is utilized by an airline. Since airlines are capital intensive and have high fixed costs, the efficiency with which they utilize their assets is key to generate adequate return on investment.

Available seat miles (or ASM) is the measure of airline capacity. It’s calculated as the total number of seats multiplied by the total distance travelled. While RPM (or revenue passenger miles) is a measure of demand, ASM is the measure of supply.

The airline industry is an important contributor to the U.S. economy’s growth. According to Airlines for America (or A4A), the industry drives $1.5 trillion in U.S. economic activity and more than 11 million in U.S. jobs.

Cyclical industries follow the business cycle, so their revenues are higher during economic prosperity and lower during economic contraction. The airline industry is sensitive to changes in economic growth.

The global aviation industry consumes over 200 million tons of fuel per year. The rising demand for air transport and the rising crude oil prices could impact the industry’s carbon emissions. The environmental impact could also influence sustainability.

Technological advancement has been the driving factor for improving airlines’ operational efficiency. Airlines have been able to reduce costs and improve operations by using advanced aircraft engine technology, IT solutions, and mobile technology. The technology has created better connectivity and enhanced passengers’ travel experience.

The Boston Consulting Group researched the millennial generation’s travel preferences in the business and leisure segment. This will provide a better understanding of how social and demographic factors influence air travel. It will also show how the factors influence company strategies to adopt to the changing trends.

Categorizing generations in the U.S. according to the year of birth provides insight into the changing trends in the travel and tourism industry. The demand for air travel has increased significantly over the years. Demographic factors also play an important role in forecasting demand.

Like most industries, the airline industry is impacted by the economic cycle’s peaks and troughs. The current growth in developed economies—like U.S.—has resulted in a rise in business confidence, industrial production, and international trade.

The Political, Economic, Social, Technological, Environmental, and Legal (or PESTEL) framework covers the six external factors that impact the airline industry. The framework provides a broad perspective on opportunities and threats that surround the industry. The factors can’t be controlled by the industry.

As mentioned in the previous article, break-even load factor is calculated by dividing cost per available seat mile (or CASM) with yield per passenger mile and Southwest has the lowest break-even load factor compared to its peers. In this article we will analyze yield and cost structures of Southwest with its peers’ to determine how […]

Higher aircraft utilization will result in lower fixed costs per unit, as the costs spread across more air trips and passengers and results in lower cost per available seat mile.

JetBlue Airways’ (JBLU) operating revenue has increased at a four-year compounded annual growth rate (or CAGR) of 13.4%, driven primarily by the growth in passenger revenue.

JetBlue has almost equal share in Florida, Latin America, and the transcontinental region which together accounted for about 87% of JetBlue’s total capacity.

JetBlue (JBLU) operates a hybrid business model that caters to the niche market comprising customers that it defines as “underserved customers.”

JetBlue Airways Corporation is the fifth largest passenger carrier in the U.S. based on revenue passenger miles.

Over the last decade, with increasing mergers and consolidation in the U.S. airline industry and reduced competition, air fares were expected to increase dramatically.

LCCs don’t offer all services provided by a legacy carriers like free meals and drinks.

Southwest was instrumental in revolutionizing the industry with a differentiated business model.

As of December, 2013, the passenger segment comprised 94.5% of its revenues, cargo segment 0.9%, and ancillary revenues comprised 4.6%.

Network synergies accounted for almost 50%–85% of the total synergy benefits in the past airline mergers.

American’s number one position, in terms of revenue share as shown in the following chart, was replaced by United.

United has partnered with Aviation Partners Boeing (APB) to launch the Split Scimitar winglet. The new winglet is expected to save more than 45,000 gallons of fuel per aircraft per year.

Under United’s MileagePlus program, members earn mileage credits for flights on United, United Express, airlines in Star Alliance, and other airlines that participate in the program.

Frequent-flyer programs are incentives given to customers by airlines to increase customer loyalty by awarding free miles on tickets purchased.