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Aviation Industry Analysis. Isabel Molina, Matteo Nebiolo and Mia Rabadam. Aviation Industry is Born. 1903- Wright brothers first successful flight 1926- Air Commerce Act was passed for passenger safety (postal mail flights) 1927- Charles Lindbergh crosses the Atlantic

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Aviation industry analysis

Aviation Industry Analysis

Isabel Molina, Matteo Nebiolo and Mia Rabadam


Aviation industry is born
Aviation Industry is Born

  • 1903- Wright brothers first successful flight

  • 1926- Air Commerce Act was passed for passenger safety (postal mail flights)

  • 1927- Charles Lindbergh crosses the Atlantic

  • WWII research into 4 engine planes assisted the commercial aviation industry to take off.


How many
How many…

  • Worldwide in 2008, 93,000 scheduled commercial airline flights per day.

  • Over 1 billion people fly each day in the US and around the world.

  • There are over 18 million flights in the world per year.

  • About 1,000 flights cross the Atlantic every day.

  • These over Atlantic flights alone total about 400,000 flights a year.





The european union blacklist of unsafe airlines
The European Union Blacklist of Unsafe Airlines

  • Ariana Afghan Airlines

  • Air Service Comores

  • Africa One

  • African Company Airlines

  • Aigle Aviation

  • Air Boyoma

  • Air Kasai

  • Air Navette

  • Air Tropiques s.p.r.l.

  • Ato—Air Transport Office

  • Blue Airlines

  • Business Aviation s.p.r.l. Butembo Airlines

  • CAA—Compagnie Africaine d’Aviation

  • Cargo Bull Aviation

  • Central Air Express

  • Cetraca Aviation Service

  • CHC Stelavia

  • Comair

  • Compagnie Africaine d’Aviation

  • C0-ZA Airways

  • Das Airlines

  • Doren Aircargo

  • Enterprise World Airways

  • Filair

  • Free Airlines

  • Galaxy Corporation

  • GR Aviation

  • Global Airways

  • Goma Express Great Lake Business Company

  • I.T.A.B. — International Trans Air Business

  • Jetair—Jet Aero Services, s.p.r.l.

  • Kinshasa Airways, s.p.r.l.

  • Kivu Air


Black list continued
Black List continued….

  • La —Lignes Aériennes Congolaises

  • Malu Aviation

  • Malila Airlift

  • Mango Mat

  • Rwabika “Bushi Express”?

  • Safari Logistics

  • Services Air

  • Tembo Air Services

  • Thom’s Airways

  • TMK Air Commuter

  • Tracep

  • Trans Air Cargo Services

  • Transports Aeriennes Congolais (Traco)

  • Uhuru Airlines

  • Virunga Air Charter

  • Waltair Aviation

  • Wimbi Diri Airways

  • Equatorial Guinea

  • Air Consul SA

  • Avirex Guinee Equatoriale

  • COAGE—Compagnie Aeree de Guinee Equatorial

  • Ecuato Guineana de Aviacion Ecuatorial Cargo

  • GEASA—Guinea Ecuatorial Airlines SA

  • GETRA—Guinea Ecuatorial de Transportes Ae5eos

  • Jetline Inc.

  • KNG Transavia Cargo

  • Prompt Air GE SA

  • UTAGE—Union de Transport Aereo de Guinea Ecuatorial

  • Kazakhstan

  • BGB Air

  • GST Aero Air Company

  • Kyrgyzstan


More black listed airlines
More Black Listed Airlines

  • Phoenix Aviation

  • Reem Air

  • Liberia

  • International Air Services

  • Satgur

  • Weasua Air Transport, Co. Ltd

  • North Korea

  • Air Koryo

  • Rwanda Air

  • Silverback Cargo Freighters

  • Sierra Leone

  • Aerolift, Co. Ltd

  • Afrik Air Links

  • Air Leone, Ltd

  • Air Rum, Ltd

  • Air Salone, Ltd

  • Air Universal, Ltd

  • Destiny Air Services, Ltd

  • First Line Air (SL), Ltd

  • Heavylift Cargo

  • Paramount Airlines, Ltd

  • Star Air, Ltd

  • Teebah

  • West Coast Airways Ltd.

  • Swaziland

  • Aafrican International Airways, (Pty) Ltd

  • Airlink Swaziland, Ltd

  • Jet Africa

  • Northeast Airlines, (Pty) Ltd

  • Scan Air Charter, Ltd

  • Swazi Express Airways

  • Thailand

  • Phuket Airlines

  • *Source; The Official Journal of the European Union



Air canada ac
Air Canada (AC)

  • Origin: Canada

  • Number of Aircrafts: 355

  • Number of employees: 24,700

  • Passengers per year: 33, 00 million

  • Number of scheduled destinations: 171

  • Daily Departure: 1, 370

  • Founded:1937*

  • Frequent Flyer Program: Aeroplan

  • Hubs: Toronto, Montreal, Vancouver & Calgary

  • Affiliation: Star Alliance


Singapore air sia
Singapore Air (SIA)

  • Origin: Singapore

  • Number of Aircrafts: 109

  • Number of employees: 14,142

  • Passengers per year: 18,30 million

  • Number of scheduled destinations: 65

  • Daily Departure: 220

  • Founded:1947*

  • Frequent Flyer Program: Krisflyer

  • Hubs: Singapore Changi

  • Affiliation: Star Alliance


Southwest airlines
Southwest Airlines

  • Origin: United States

  • Number of Aircrafts: 500+

  • Number of employees: 35,000

  • Passengers per year: 100+ million

  • Number of scheduled destinations: 67 cities, 34 states

  • Daily Departure: 3,200 passengers

  • Founded: 1971

  • Frequent Flyer Program: Rapid Rewards

  • Hubs: 6 (Albuquerque, Chicago, Houston, Oklahoma City, Phoenix and San Antonio)

  • Affiliation: None.


American airlines
American Airlines

  • Origin: United States

  • Number of Aircrafts: 620 American Airlines

  • Number of employees: 82,000 worldwide

  • Passengers per year: 98 million

  • Number of scheduled destinations: 250 cities, 40 countries

  • Daily Departure: 270,000 passengers

  • Founded: 1934

  • Frequent Flyer Program: AAdvantage

  • Hubs: Dallas/Fort Worth, Chicago O’Hare, Miami, and St. Louis, and a large concentration of Caribbean service at San Juan, Puerto Rico

  • Affiliation: OneWorld


British airways ba
British Airways (BA)

  • Origin: United Kingdom

  • Number of Aircrafts: 245 (+51)

  • Number of employees: 48070

  • Number of scheduled destinations: 148

  • Founded: 1919

  • Frequent Flyer Program: Executive Club

  • Hubs: London LHR and GTW

  • Affiliation: OneWorld


Vueling vy
Vueling (VY)

  • Origin: Catalonia

  • Number of Aircrafts: 35

  • Number of employees: 1280

  • Passengers per year: 5 million

  • Number of scheduled destinations: 57

  • Daily Departure: 150

  • Founded: 2004

  • Frequent Flyer Program: Punto

  • Hubs: Barcelona



1 rivalry in the aviation industry
1. Rivalry in the Aviation Industry

  • High Rivalry

  • Competitive Moves include:

    • Changing Prices (Seasonal and holiday specials)

    • Product Differentiation (expanded seats, airport hubs, frequent flier miles, etc.)

    • Creative use of channels (social media, internet specials, email blasts)

    • Exploiting relationships with suppliers


2 threat of substitutes in the aviation industry
2. Threat of Substitutes in the Aviation Industry

  • When a product's demand is affected by the price change of a substitute product.

  • Examples:

    • Ryan Air vs. EasyJet in Europe

    • Southwest vs. JetBlue in US

    • British Airlines vs. American Air in both


3 buyer power in the aviation industry
3. Buyer Power in the Aviation Industry

  • Power of buyers is the impact that customers have on a producing industry

  • Strong buyer power because they possess a credible threat to buy producing firm or rival

  • Unhappy with customer service/amenities/delays fliers can easily fly rival companies.


4 supplier power in the aviation industry
4. Supplier Powerin the Aviation Industry

  • The Bargaining power of suppliers

  • Suppliers are weak because:

    • There are many competitive suppliers (airlines)

    • Credible backward integration threat by purchasers (ability to use other companies)

    • Concentrated purchasers (buyers know where and when they want to travel)

    • There is no cost to the buyer to utilize another airline. Airlines must conform to customer wants.


5 barriers to entry in the aviation industry
5. Barriers to Entryin the Aviation Industry

  • The possibility that new firms may enter the industry also affects competition

  • Difficult to Enter, Difficult to exit

    • Government creates barriers (licenses, etc)

    • Patents and proprietary knowledge serve to restrict entry.

    • Asset specificity inhibits entry into an industry.

    • Organizational (Internal) Economies of Scale.


Final selection and why
Final Selection and Why?

  • Criteria: Timeliness

    • Singapore Airlines – 93,8%

    • Air Canada – 82%

    • SouthWest – 80,4%


Differentiation Airlines

Vs. Low Cost Airlines


Differentiation Airlines

vs. Low Cost Airlines


Ratios We Analyzed

  • Current Ratio – short term indicator of the company’s ability to pay short-term liabilities from short-term assets

  • Payout Ratio – Percentage of Net Income distributed to the shareholder by way of dividends

  • Total Assets Turnover – how effective the management is at using the assets of the company

  • Dividend Yield Ratio – dividends given to shareholders based on market values

  • Net Profit Margin Ratio – how management has controlled the business and the extent to which they have generated profits







Conclusions

  • One of the largest monopoly's existing in North America.

  • Despite revenue have not been able to provide any form of decent dividend to the shareholders.

  • Government bail outs are the norm for Air Canada.

  • What to expect in the future…..

  • Unless they learn how to minimize costs they will not be able to grow in this declining economy.

  • Despite being a monopoly perhaps they should exam some of the cost cutting factors and short term goals that “no frills” airlines use.


Conclusions

  • Airlines with the largest fleet (more assets)

  • Despite the economy faltering has remained consistent in utilizing their assets to the fullest

  • Has increased in capabilities of meeting short-term liabilities

  • What to expect in the future:

  • Will continue to grow as the US’ no-frills leading airline based on their ability to meet short term goals through the economic crisis.


Conclusions

  • Best Airline in the world

  • Strong in assets that are

  • constantly renew as e.g. it is..

  • One of the few companies which

  • bought the new A380

  • Will follow the big economic growth

  • of east countries

  • What to expect in the future:

  • Will always continue being the airways used to link western countries with east.


THANKS FOR LISTENING!

Have a good journey to your family for Christmas.


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