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Passenger Airlines Industry Business Issue Overview EDS

Source: www.eds.com
Topic: Airline Industry

Sort Desciption: industry business issue overview passenger airlines. < >. Return to profitability and growth. Beyond the cyclical nature of the airline industry, ...

Content Inside: >> industry business issue overview Gain maximum operational performance eds.com passenger airlines industry business issue overview passenger airlines < > Return to profitability and growth Beyond the cyclical nature of the airline industry, air transportation has changed significantly over the past five years. U.S.-based carriers alone incurred a $32.2 billion loss in the past four years. And according to the International Air Transport Association (IATA), globally the industry is expected to lose $6 billion this year and $4.2 billion in 2006 before returning to the black in 2007 with a profit of $6.2 billion. Although achievable, recovery will not be easy. The business environment today is different than it has ever been. Airline yield premium compression has been dramatic, likely permanent, and will continue to push down ticket prices. To thrive in this new marketplace, airlines will need to operate differently. New rules of engagement are required as carriers and their business partners explore new ways of increasing revenue per flight beyond the traditional passenger ticket. Due to the price transparency and increasingly sophisticated consumer knowledge brought about by the Internet, carriers − both legacy and low-cost carriers – face new challenges. A reduction of more than 50 percent in ticket prices over the past 25 years is one example. Today, carriers need additional methods for reducing costs as well as new and more efficient ways of interacting in the marketplace. They must also look to identify and optimize the value of their customer base, and establish new opportunities for expanding their revenue sources. As carriers explore new business models, they must also balance and evaluate every aspect of their business – from sales, to operations, to security, to labor structure. Although losses decreased over the past two years, carriers still must find new ways to reduce costs. Nothing is sacred. Airlines must ass ...

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