The American Airline Industry Essay -- Business Management Studies Air

The American Airline IndustryThe Airline Industry is a highly competitive pains with companiesoperating in domestic and/or international markets. Many airline businesss arstilled owned by their respective countries and keep up treaties betweencountries to allow airlines to land there. The industry has beentaking a relatively shaky course as be are rising and lettuce havebeen decreasing. This was further intensified with the recentterrorist attacks on US soil, which t direct to higher costs as the needfor more security arose. fresh financial statements of major airlinesshowing major losses reflect the problems that the industry is having.Yet amidst the storm, some regional airlines such as Jet dreary Airlineshave managed to focus on specific markets and maintained or change magnitudetheir profits. It is no doubt that Porters 5 forces of competitionare at play in this industry. These forces are the Threat ofSubstitutes, Threat of crude Entrants, Competitive Rivalry, Bargain ingPower of Buyers and Bargaining Power of Suppliers.Threat of SubstitutesThe airline industry has been plagued by rising costs resulting inpoor profits. The recessional adversely affected the industry during thefirst half of 2001. This was intensified by the crime syndicateember 11thattacks, when two airlines were crashed into the Twin Towers in NewYork metropolis by terrorists killing everyone on board and demolishing thebuildings. This lead to an present(prenominal) reduction in air travel ascustomers did not notice safe about flying and an increase in the use of new(prenominal) forms of transportation. Amtrak, a railway company, reported anincrease in passenger stack in the days following the attacks. Thoughthis has leveled off as things returned to normal, rail travel is a support for air travel that will be utilized by customers if theyare smell for cheaper travel and if they are looking for a leisuretrip that would not be too epoch consuming. Automobiles are also a for mof travel that is a substitute for air travel. This is especially thecase when a family is traveling as the costs are minimized andschedules coordinated on the travelers timetable.Threat of New EntrantsHistorically, doorway into the market has been relatively easy forairline companies. When the economy was booming, people traveled morefor leisure and companies used this opportunity to enter th... ...aken from Hoovers Online)Revenues (in Millions) Sept 2002 Sept 2001US Airways 1903.0 2493.0American 4494.0 4816.0 southwestern United States 1391.2 1335.1Net Income (in Millions) Sept 2002 Sept 2001US Airways (248.0) (24.0)American (924.0) (414.0)Southwest 74.9 151.0Total Assets (in Millions) Sept 2002 Sept 2001US Airways 7705.0 9564.0American 31502.0 31840.0Southwest 8954.3 7994.9Total Debt (in Millions) Sept 2002 Sept 2001US Airways 10 808.0 10106.0American 28991.0 25609.0Southwest 4631.6 4045.3EPS (in dollars) Sept 2002 Sept 2001US Airways (3.64) (.36)American (5.93) (2.68)Southwest .09 .19Revenue rider Miles Oct 2002 Oct 2001US Airways 2,965,753 2,802,967American 3,048,000 2,851,000Southwest 3,258,017 2,590,610Load Factor (%) Oct 2002 Oct 2001US Airways 66.9 61.7American 63.2 57.8Southwest 56.8 53.4