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The Competitive Status of the U.S. Civil Aviation Manufacturing Industry A Study of the Influences of Technology in Determining International Industrial Competitive Advantage (1985) / Chapter Skim
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Pages 30-36

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From page 30...
... The termination of airline economic regulation in 1978 removed the TABLE 2-1 Jet Fuel Costs, 1970-1982 As Percent of Cost Index Cash Operating Year (1972= 100) Expenses 1970 93.7 12.7 1971 97.0 12.6 1972 100.0 12.0 1973 109.3 12.2 1974 208.0 17.4 1975 249.7 19.1 1976 271.6 19.5 1977 310.6 20.5 1978 336.8 20.1 1979 496.0 25.1 1980 766.1 30.5 1981 892.7 30.3 1982 841.6 28.1 SOURCE: Air Transport Association of America, Inc., Aerospace Facts and Figures, 198 3/1984, p.
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From page 31...
... Table 2-2 shows a 79 percent reduction in airports served exclusively by the majors and a 58 percent increase in airports served exclusively by regionals. Table 2-3 shows that in March 1983, 15 major carriers were serving only 42.8 percent of the city-pairs they had served in March 1978.
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From page 32...
... Consequently, the number of major airlines serving major hubs has tended to increase significantly, while
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From page 33...
... Figure 2-2 shows the significant increase in service being offered by the 11 major airlines at the 25 largest hubs. Many of the major airports are now serving as key transfer points for passengers.3 Evaluation of the consequences of deregulation for the passenger depends very much on one's point of view, and both advocates and opponents have strongly held views.
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From page 34...
... 1983) — Average number of major carriers = 10 an 2 3 4 _ it_ 5 6 7 0 1 8 9 10 NUMBER OF U.S.
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From page 35...
... These new carriers obviously have very low costs in their selective route operations and can price their seats to be profitable at the margin for less than the established carriers, which have a large infrastructure, union salary scales and work rules, and the loan payments on highly efficient modern aircraft. There are several consequences: · Ticket prices stay low, driven by the lower costs of the new entrants, so that some established carriers continue to incur losses or nominal profits even as traffic grows.
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From page 36...
... aircraft manufacturers to launch new aircraft. Depressed traffic and earnings of the airline industry have caused a severe reduction in new orders, deferment of deliveries, and in a number of cases, inability to take delivery of firm-order aircraft.
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Key Terms

  • major carriers
  • major airlines
  • airports served
  • financial performance
  • air travel

  • air transport
  • aircraft manufacture
  • aircraft manufacturers
  • commuter market
  • major hubs

  • transport association
  • trunk airlines
  • largest hubs
  • passenger service
  • jet transport

  • foreign competition
  • operating costs
  • lower costs
  • fuel costs
  • modern aircraft

  • airline industry
  • airline economic
  • regional carriers
  • operating experience
  • future markets

  • established carriers
  • route structure
  • operating cost
  • served exclusively
  • work rules


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