Airlines - US - January 2007

Table of Contents

• Scope and Themes
• What you need to know
• Definition
• U.S. airline market
• Major airlines market
• Discount airlines market
• Abbreviations and terms
• Abbreviations
• Terms
• Executive Summary
• A complex market
• Operating revenues hide the turmoil...
• ...As large losses and wave of bankruptcies shake the industry
• High ad spend--business as usual
• The Consumer
• Consolidation beckons--competition declines as carriers cut capacity to raise prices
• Market Drivers
• Growth in U.S. economy continues
  • Figure 1: U.S. gross domestic product, 2000-06
• Growth in high income brackets creates industry growth.....
  • Figure 2: Number of households per income group, 1999 and 2005
• ... but median household income falls
  • Figure 3: Median household income, 1994-2004
• Annual crude oil and jet fuel prices
  • Figure 4: Crude oil prices versus average jet fuel paid, 2001-06
• Passenger prices
  • Figure 5: Annual passenger real prices (in 1978* cents per passenger mile) for the domestic and international markets, 2001-05
• Airline bankruptcies introduce uncertainty
• Security concerns make flying harder
  • Figure 6: Attitudes to air travel safety, October 2006
• Lack of vacation time limits personal travel
  • Figure 7: Employees with access to paid vacation and paid holidays, 1999-2005
• Business travel boosts airline industry
• Market Size and Trends
  • Figure 8: Total U.S. operating revenues of U.S. passenger and cargo airlines, at current and constant prices, 2000-06
  • Figure 9: Net profit/loss and profit/loss margins of U.S. passenger and cargo airlines, at current and constant prices, 2000-06
  • Figure 10: Total Worldwide operating revenues of all passenger and cargo airlines, at current and constant prices, 2000-06
  • Figure 11: Total U.S. operating revenues in relation to Worldwide operating revenues of all passenger and cargo airlines, at current and constant prices, 2000-06
  • Supply Structure
  • Figure 12: Operating revenue of U.S. airlines, 2003 and 2005
  • Figure 13: Total gains/losses by leading U.S. airlines, 2003 and 2005
• Method of booking
  • Figure 14: Who usually makes flight reservations and how, October 2006
  • Figure 15: How often do you choose/change date of personal air travel to get cheap fares, October 2006
• Companies and brands
• American Airlines
• UAL Corporation/United Airlines
• Delta Airlines
• Northwest Airlines
• Continental Airlines
• US Airways Group
• Southwest Airlines
• JetBlue
• Alaska Air Group
• AirTran Airways
• Frontier Airlines
• ATA
• Spirit Airlines
• Advertising and Promotion
• Overview
• Delta Airlines
  • Figure 16: Delta TV spot, 2006
• American Airlines
  • Figure 17: American Airlines TV spot, 2006
• United Airlines
  • Figure 18: United Airlines TV spot, 2006
• Southwest Airlines
  • Figure 19: Southwest Airlines TV spot, 2006
• Continental Airlines
  • Figure 20: Continental Airlines TV spot, 2006
• US Airways
• Northwest Airlines
• JetBlue
• Alaska Airlines
• AirTran Airways
  • Figure 21: AirTran Airways TV spot, 2006
• Frontier
  • Figure 22: Frontier TV spot, 2006
• ATA
• Spirit Airlines
• The Consumer
• Introduction
• Summary
• Key findings
• Domestic air travel
  • Figure 23: Number of domestic plane trips in the last 12 months, May 2005-June 2006
• Reasons for last trip--domestic air travel
  • Figure 24: Reason for last domestic plane trip in the last 12 months, May 2005-June 2006
• Frequency of domestic vacation/personal travel
  • Figure 25: Number of domestic plane trips in the last 12 months, for vacation/personal travel,
• Frequency of domestic business travel
  • Figure 26: Number of domestic plane trips in the last 12 months, for business travel, May 2005-June 2006
  • Figure 27: Number of domestic plane trips in the last 12 months, for business travel by age,
  • Figure 28: Number of domestic plane trips in the last 12 months, for business travel, by household income, May 2005-June 2006
• International air travel
  • Figure 29: Number of international plane trips in the last three years, May 2005-June 2006
• Frequency of international personal travel
  • Figure 30: Number of international plane trips in the last three years, for personal travel, May 2005-June 2006
• Frequency of international business travel
  • Figure 31: Number of international plane trips in the last three years, for business travel, May 2005-June 2006
  • Figure 32: Number of international plane trips in the last three years, for business travel, by age, May 2005-June 2006
  • Figure 33: Number of international plane trips in the last three years, for business travel, by household income, May 2005-June 2006
• Reason for last international trip
  • Figure 34: Reason for last international trip in the last three years, May 2005-June 2006
• Frequent flyer programs
  • Figure 35: Current membership of any frequent flyer program, by age, May 2005-June 2006
  • Figure 36: Current membership of frequent flyer programs, by race/ethnicity, May 2005-June 2006
  • Figure 37: Current membership of frequent flyer programs, by region, May 2005-June 2006
• Proprietary research
• Number of round trip flights taken
  • Figure 38: Number of round trip flights taken in the last year, by age, October 2006
  • Figure 39: Number of round trip flights taken in the last year, by household income, October 2006
  • Figure 40: Number of round trip flights taken in the last year, by race/Hispanic origin, October 2006
• Frequency of business flights
  • Figure 41: Number of business-related flights taken in the last year, by gender, October 2006
  • Figure 42: Number of business-related flights taken in the last year, by age, October 2006
  • Figure 43: Number of business-related flights taken in the last year, by household income, October 2006
• Method of booking business flights
  • Figure 44: Who usually makes business flight reservation and how, by race/Hispanic origin, October 2006
• Choice of airline--business flights
  • Figure 45: Airlines flown with in the last year for business, by race/Hispanic origin, October 2006
• Method of booking personal flights
  • Figure 46: Who usually makes personal flight reservations and how, by age, October 2006
• Choice of airline--personal flights
  • Figure 47: Airlines flown with in the last year for personal travel, by age, October 2006
  • Figure 48: Airlines flown with in the last year for personal travel, by household income, October 2006
  • Figure 49: Airlines flown with in the last year for personal travel, by race/Hispanic origin, October 2006
  • Figure 50: Airlines flown with in the last year for personal travel, by region, October 2006
• Combining business and personal travel
  • Figure 51: How often business and personal travel were combined, by household income, October 2006
• Attitudes to flying and price
  • Figure 52: Ever taken a slower form of transport to avoid flying, by age, October 2006
  • Figure 53: Ever taken a slower form of transport to avoid flying, by household size, October 2006
  • Figure 54: How often do you choose/change date of personal air travel to get cheap fares, by age, October 2006
  • Figure 55: How often do you choose/change date of personal air travel to get cheap fares, by household size, October 2006
• Attitudes to air travel
  • Figure 56: Attitudes to air travel, October 2006
• Future and Forecast
• Future trends
• Consolidation beckons....again
• Average ticket prices rise slowly
• Amenity creep as airlines upgrade
• Capacity shifts from domestic to international routes
• Market forecast
• U.S. passenger and cargo airlines
  • Figure 57: Forecast of total U.S. operating revenue of passenger and cargo airlines, at current and constant prices, 2006-11
• Forecast factors
• Appendix: Trade Associations