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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%
slide25

Differentiation Airlines

Vs. Low Cost Airlines

slide26

Differentiation Airlines

vs. Low Cost Airlines

slide27

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
slide33

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.
slide34

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.
slide35

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.
slide36

THANKS FOR LISTENING!

Have a good journey to your family for Christmas.

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