LOGISTICS

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Introduction

World events definitely have an impact on travel , particularly the airline industry . During the early 1990s , people found it very hard to find good flight deals priced reasonably then came the beginning of the 1st Persian Gulf War . A lot of people canceled their flights , while those who re-booked were not charged any extra fee . In 1978 , the industry went through deregulation resulting in accelerated industry consolidation and competition , and market trends incorporated code-sharing and acquisitions among airlines

Aside from airline companies , only

some businesses are constantly at risk of losing money because of events that are beyond their control such as war , calamities and bad weather , and terrorist activities . For the airline industry to make money , so many things have to work right

The Macro Environment of the Airline Industry

When a plane crash takes place , the immediate impact is that a lot fewer people will book flights . Gradually , however , traffic would build up again . Financial analysts of an airline company employ models to help them predict the effects of a plane crash , but every case was always a little different (Naylor , 2007

High fixed costs are involved in the airline industry , including capital expenses for purchasing and retrofitting airplanes . The prices of fuel are a huge and fluctuating ongoing expenditure . Airlines shell out 14 billion per year on a new aircraft just to maintain the age of their fleet at the present average of twelve years (CreditSights

The airline industry is...