The Airline Industry

Anna Jorgensen - BCOM 214

05/01/2021

Table of Contents

Introduction……………………………………………………………………………..…Page 1
The Big Four……………………………………………………………………………...Page 1
United…………………………………………………………………………………….. Page 2
American.………………………………………………………………………………….Page 2
Delta.………………………………………………………………………………………Page 2
Southwest ………………………………………………………………………………...Page 3
Profitability Trends …………………………………………………………………….Page 3/4
Effects on the Planet…………………………………………………………………..Page 4/5
What’s Next? ……………………………………………………………………………..Page 5
 Page 1
Introduction

On December 17, 1903 Orville Wright traveled 120 feet in the span of 12 seconds in the
first sustained flight in a powered airplane (Avjobs). Now, just over 100 years later, the
airline industry accommodates 2.9 million passengers on around 45,000 flights day
(Avjobs). What once was a $1,000 airplane model, is now a $641 billion dollar industry
(Avjobs). Air travel was slow to take off after the Wright brothers. Some of today’s
biggest airline companies like United, American, Delta, and Southwest appeared around
the 1920’s, but it wasn’t until the 1950’s that air travel became a central means of
transportation. Aviation currently represents 3.5% of the GDP worldwide and has
created over 65 million jobs worldwide (Avjobs). The following report highlights the main
elements of the Airline industry and its competitors.

The Big Four

United, American, Delta, and Southwest are currently recognized as the 4 major US
airlines. Together they make up about 66% of the domestic US market share (Salas).
The following graph gives a breakdown of these four carries and their competitors
(Salas):
 Page 2
United

United Airlines offers more flight destinations than any other airline, totaling a whopping
389 locations both internationally and domestically. It was founded in 1926 and is
headquartered in Chicago, IL (United). A fun fact about United airlines is that they
employed the first female flight attendant, Ellen Church, in 1930 (United). United
operates about 4,900 flights a day on average. United was the first airline to serve hot
meals to their passengers while in the air. They were also the first US carrier to use
biofuel and have one of the most rewarding frequent flyer programs amongst its
competitors (United)!

American

American Airlines is considered the largest airline in the world. This includes fleet size,
revenue, passengers, and km flown. American had the leading market share from
January to December of 2021, however they are currently struggling to recover from the
impacts of COVID-19 and are in $25 billion dollars of net debt. This has caused
speculation that the “big 4” might soon turn into the “big 3” . American was founded in
1926 and its headquarters are located in Ft. Worth, Texas (American). American
operates a significantly higher number of flights compared to its competitors, overseeing
about 6,700 flights daily (American).

Delta

Delta seems to be the leader of the pack. Not only was Delta the first of the big 4
airlines to be founded in 1925, but they also had many other firsts for the airline industry
as well. They were the first airline to ban smoking in 1995 and to establish an onboard
recycling program in 2008 (Deta). Delta also became the first airline to board more than
100 million passengers in a year in 1997. Delta is headquartered in Atlanta, GA and
operates about 5,400 flights daily (Delta).
 Page 3
Southwest

Southwest is unique amongst the major airlines as it only flies domestically in one type
of airplane (Boeing 737). Flying only Boeing 737’s helps cut costs more than you would
think, and has helped keep Southwest profitable for the past 44 years in a row
(Southwest). Using the same plane makes parts interchangeable and ensures
everything operates at the same standard. Southwest typically flies shorter routes due
to the plane's fuel capacity and is also able to cut turnaround times as well. They were
founded in 1967 and are headquartered in Dallas, Texas (Southwest). Southwest only
flew to Dallas, Houston, and San Antonio until 1975, but now operates about 4,000
flights daily (Southwest).

Profitability Trends

The airline industry has been steadily increasing since 1903. Between 2009 and 2019
revenue in the global aviation industry grew about 5% (Josephs). However, there have
been two events that have heavily impacted its profitability: 9/11 and COVID. 9/11
caused an 8 billion dollar loss in the industry (Josephs). The only event to top that?
COVID, which resulted in about a 32 billion dollar (45%) economic loss for the industry
that they are still trying to recover from (Josephs). Here is graph by CNBC comparing
the severity of these two events (Josephs):
 Page 4

Not only did these events impact the industry financially, but they also caused shifts in
travel norms as well. Before 9/11 airport security was minimal. We now head to the
airport planning to wait for an hour or more in security lines requiring us to take off
shoes, sweatshirts, remove liquids and electronics from our bags, and step through a
full body x-ray. COVID also requires us to wear masks in airports and on planes.
Although this mandate might soon be revoked, sanitary procedures implemented as a
result of COVID will likely remain in effect.

Effects on the Planet

One thing that is not discussed very often is the airline industry's effect on our planet.
Believe it or not, airline travel only accounts for about 2% of CO2 emissions annually
(Overton). For comparison, road transport contributes to 17% of our emissions. In fact,
about 92% of aircraft engine exhaust is simply oxygen and nitrogen which naturally
occur in the earth atmosphere (Overton). However, this does not mean that the aviation
industry is not harming this planet. Air travel is currently producing the highest and
fastest growth of individual emissions. Below is a graph of the effects each chemical of
jet aircraft emissions can have on the planet (Overton):

Page 5
If trends continue, airline emissions could triple by 2050 (Overton). Although CO2 and
other greenhouse gas emissions given off by jets are regulated, it is important that we
continue to strive to keep these emissions as minimal as possible. The Carbon
Offsetting and Reduction Scheme for International Aviation, or CORSIA, is currently
aiming to prevent 2.5 tonnes of CO2 emissions in the next 15 years by using
sustainable lower-carbon fuels, flying more efficient aircrafts, and upgrading technology
to set more accurate flight paths and reduce delays (Yesenofski).

What’s Next?

Although still impacted by COVID, current travel trends predict that the demand for air
travel will increase at a rate of about 4.3% over the next 20 years, further increasing
GDP and job opportunities along with it (ICAO). Below is a graph predicting passenger
volume and revenue trends for the next 25 years (ICAO):

As technology continues to advance, aviation is expected to grow and adapt with it.
New lighter, more efficient aircrafts with artificial intelligence are already in the works
(ICAO). Drones that we now use to deliver packages may soon enough evolve into a
means of transport for humans around the city. Looking at how fast air travel has
evolved in the past 100 years puts almost no limits for what might possibly be in store
for the next 100 years!
End Notes

● Airline Tickets & Flights: Book Direct with Delta Air Lines - Official Site. (n.d.).
Retrieved May 1, 2022, from https://www.delta.com/
● American Airlines - airline tickets and cheap flights at aa.com. (n.d.). Retrieved
May 2, 2022, from https://www.aa.com/homepage
● Book flights, make reservations & plan A trip. Southwest Airlines. (n.d.).
Retrieved May 1, 2022, from https://www.southwest.com/
● Future of aviation // . Future of Aviation. (n.d.). Retrieved May 1, 2022, from
https://www.icao.int/Meetings/FutureOfAviation/Pages/default.aspx
● History of aviation - first flights. Avjobs, Inc. (n.d.). Retrieved May 1, 2022, from
https://www.avjobs.com/history/index.asp
● Josephs. (2021, September 11). How the Sept. 11 terrorist attacks Forever
Changed Air Travel. CNBC. Retrieved May 1, 2022, from
https://www.cnbc.com/2021/09/11/how-9/11-forever-changed-air-travel.html
● Overton, J. (n.d.). Fact sheet: The growth in greenhouse gas emissions from
Commercial Aviation (2019). EESI. Retrieved May 1, 2022, from
https://www.eesi.org/papers/view/fact-sheet-the-growth-in-greenhouse-gas-emiss
ions-from-commercial-aviation
● Salas, E. B. (2022, March 11). U.S. Airline Industry Market Share 2019. Statista.
Retrieved May 1, 2022, from
https://www.statista.com/statistics/250577/domestic-market-share-of-leading-us-a
irlines/
● United Airlines. (n.d.). Retrieved May 2, 2022, from https://www.united.com/
● Yesenofski, S. (2021, November 17). Reducing aviation's climate impact.
Environmental Defense Fund. Retrieved May 1, 2022, from
https://www.edf.org/climate/aviation