The Industry Handbook: The Airline Industry
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Given the very strong financial position of the US airline industry, carriers have been heavily investing in improving the customer experience — making the in-flight experience more comfortable, providing free snacks, and improving physical product and seat offerings in premium cabins. Airlines also have been upgrading their fleets with more fuel-efficient, next-generation aircraft.
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Airlines and airports belong to the same ecosystem, and improving the financial health of one entity has a direct impact on the other. US airports have experienced increased traffic levels and operations and have, therefore, enjoyed increased profitability. Significant airport capital improvement projects are expected over the next five years with terminal re-developments, additional gates, and an enhanced experience for customers traveling through airports. Ultimately, that’s all good news for the industry.
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A return to growth in passenger yield is an example of the industry’s enduring strength. In fact, in 2017 yield became the second biggest contributor, after new capacity, to revenue gains for US airlines – particularly for the network carriers’ domestic operations.
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In its eighth year, the 65-page report covers a range of aviation industry-specific economic and performance data as well as global capacity growth by region. The report also includes analyses on:
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Even so, the recent resilience of US airlines is an impressive reversal of fortune after their cumulative performance from 2000 through 2014, when they lost $29 billion. While profits declined somewhat in 2016 and 2017, it was only in comparison with 2015, the most profitable year in the industry’s history.