Airline Trends in the Airline

Airline

Trends in the Airline Industry: The Fate of Legacy Carriers like American Airlines

Demographics

According to a 2006 study entitled "U.S. Airline Industry: Emerging Trends," the increased globalization of American industry has made regional airline hubs more important. More and more small, regional companies are sending their representatives abroad to do business with other nations. Making regional airports more international in focus, to enable more 'seamless' and streamlined travel for businesspeople is likely to be a future trend in the aviation industry ("U.S. Airline Industry: Emerging Trends," 2006, Aviation Planning, p.4). Even American Airlines must take a more global perspective of its core audience, and expand upon its non-costal hubs. "Some legacy carriers will demonstrate that they can deliver a streamlined business-traveler service offering, relying on lower unit costs and revamped hub networks, to ensure their long-term survival," in comparison to their smaller regional counterparts ("Unisys Predicts 10 Trends That Will Drive Global Airline Industry Transformation in 2005," 2005, Enterprise Networks & Servers). However this could de-emphasize transcontinental air travel and could even mean that legacy carriers "vanish from U.S. non-hub transcontinental markets and other non-strategic markets as they re-focus on their streamlined hub-and-spoke networks. ("Unisys Predicts 10 Trends That Will Drive Global Airline Industry Transformation in 2005," 2005, Enterprise Networks & Servers)

Economic

Concerns about the price of oil are likely to continue. Oil has risen as high as $60-70 a barrel in recent years, requiring airlines to offset the costs. Higher fares and scaled-back amenities, such as snacks and meals, are likely to continue and fares may have to increase as well, even at lower-cost airlines ("U.S. Airline Industry: Emerging Trends," 2006, Aviation Planning, p.2). In fact, legacy carriers like American may be better able to offset costs than lower-budget airlines like Jet Blue.

Political & Legal

Larger legacy carriers will also be better able to deal with the increasingly prohibitive and bureaucratic security restrictions, such as the added restrictions regarding carry-on luggage at airports after the London subway bombings. Added security restrictions can cause delays that may result in flights being canceled, which are more difficult for smaller airlines to deal with. The weather-related delays that paralyzed Jet Blue during the Valentine's Day storm of 2007 are further evidence of this fact.

Sociocultural

However, the entire airline industry may suffer if the burdens and troubles of flying become too great. Industries are able to use technology to connect with different corporate branches, such as the Internet and video conferencing. Families may wish to forgo the possible hassles of air travel, and stay closer to home on vacations. This could result in decreased demand, especially for business travelers and flights to popular vacation destinations. The culture of the nation could deemphasize making travel part of the traditional family vacation, and part of the organizational culture of some critical industries.

Technological

Advances in communicative technology could thus work against the airline industry. As communication through technology without travel grows easier, businesses may not wish to suffer the cost and the expense of sending their representatives abroad, in person.