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The future of the flight path pains Going into free-fall or climbing steady? he year 2005, was an eventful year for the airline industry. deuce of Americas main airlines, Delta and Northwest, ?led for Chapter 11 bankruptcy, recruit numbers of aircraft orders were made, oil prices rose to an average of $57 a barrel leading to vastly increased fuel costs, and BA announced that it would be slashing one-third ( everywhere 1,700) managerial posts by 2008. And these were just a fraction of the stories that grabbed the headlines over the course of the year. T So what does the future have in store for this industry? argon we about to see a bloodbath of price wars that result s arrest costs spiraling out of control and exit many airlines out of business? Or is this the beginning of a slow but steady recovery as airlines bene?t from rising passenger numbers, more ef?cient labor operations and integrating of networked carriers? Interestingly there ar two opposing schools of sight on this matter. Downwards spiral The nearly common view is that the airline industry is in its usual state of turmoil. This is backed up by a number of facts: B B By the end of 2005, the worlds airlines lost a cumulative $43 billion since 2001.

Oil prices (which account for around 15 pct of an airlines cost) rocketed to an average of $57 a barrel, driving total industry costs to a staggering $97 billion over the course of the year. The number of US airlines in Chapter 11 bankruptcy rose. To date Delta, Northwest, Fly Inc, ATA and United Airlines have experienced kindred woes. Despite slashing its operating costs in a bid to improve pro?ts, BA owes $3.5 billion (nearly half(prenominal) its market value) to pension funds. Supply far outstrips demand. In 2004 Continental airlines cut $9 million in costs and moreover still made losses of $363 million. B B B B There are a number of reasons for these industry shortfalls. In the USA the most obvious culprit, according to professors at Wharton... If you want to get a full essay, order it on our website: Orderessay

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