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Airlines Industry

This document summarizes key aspects of the global airline industry. It discusses that the aviation industry is one of the fastest growing transportation sectors, carrying over 4.5 billion passengers in 2018 and generating $606 billion in revenue. It then outlines some of the industry's characteristics like barriers to entry and high operating costs. Metrics for measuring operational performance are presented, including load factor, revenue passenger miles, revenue per employee, arrival/departure delays, and runway incursion rates. Finally, a table compares the load factor and revenue passenger mile metrics of 5 major airlines.

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Alolika Dutta Roy
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71 views10 pages

Airlines Industry

This document summarizes key aspects of the global airline industry. It discusses that the aviation industry is one of the fastest growing transportation sectors, carrying over 4.5 billion passengers in 2018 and generating $606 billion in revenue. It then outlines some of the industry's characteristics like barriers to entry and high operating costs. Metrics for measuring operational performance are presented, including load factor, revenue passenger miles, revenue per employee, arrival/departure delays, and runway incursion rates. Finally, a table compares the load factor and revenue passenger mile metrics of 5 major airlines.

Uploaded by

Alolika Dutta Roy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Presented by:

Alolika Dutta Roy


Gunjan Jangid
Gunjan Wagh
Nidhi Nagpal
Prekshi Choksey
Shefali Agarwal
Soham Roy
AIRLINES INDUSTRY
• The aviation industry is one of the fastest transportation sectors.
• Commercial airlines carried more than 4.5 billion passengers in
2018.
• Expected to generate global revenue of 606 billion U.S. dollars in
2019.
• DELAG (Deutsche Luftschiffahrts-Aktiengesellschaft) was
the world's first airline found on November 16, 1909.
KEY CHARACTERSTICS

• Barriers to entry- oligopoly


• Seats cannot be stored
• High operating gearing
• Many markets highly seasonal
• Long aircraft ordering lead times
• Poor financial performance
LEADING AIRLINE GROUPS WORLDWIDE IN 2018,
BASED ON PASSENGERS(IN MILLIONS)
5 KEY PLAYERS
OPERATIONAL PERFORMANCE METRICS

According to International Civil Aviation Organization


(ICAO) operational performance metrics is a
performance indicator and can be defined as “a tool for
quantitatively measuring current, past and expected
future performance as well as the degree to which
performance objectives are being met and should be
met”.
To be simply put a performance metric is a standard for
measuring performance.
OPERATIONAL PERFORMANCE METRICS
USED BY AIRLINES INDUSTRY
1. Load factor :
•Passenger load factor, or load factor, measures the capacity utilization of airlines.
•Higher load factor values make the airline more profitable by spreading fixed-cost
expenses across more passengers.

2.Revenue passenger miles :


•A revenue passenger mile (RPM) is a transportation industry metric that shows the
number of miles traveled by paying passengers.
•It is a is a measure of demand, airlines have to try to match supply with demand
for passengers' benefit.
3.Revenue per employee:
•It is a financial ratio that measures the revenue generated by each employee of the
company on average.
•It is a meaningful analytical tool because it measures how efficiently a particular firm
utilizes its employees.

4.Number of arrival and departure delays :


•A delayed flight as one in which the aircraft fails to release its parking brake less than
15 minutes after the scheduled departure time. Similarly arrival time.
•On time performance helps the airline to grow in the market.

5.Runway incursion rates :


•A runway incursion is an incident where an unauthorized aircraft, vehicle or person is
on a runway.
•Less runway incursion rate signifies high efficiency.
COMPARISON OF TWO METRICS OF 5 AIRLINES

Metrics American Delta Southwest United Lufthansa


airlines airlines airlines airlines airlines

Load factor 82 85.5 81.6 84.9 81.4


(%)
Revenue 231.16 225.24 133.32 230 145.87
passenger
mile (Billion)
THANK YOU

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