Unique Economic characteristics of Airlines
- Government financial assistance
- Till 1970 Govt. maintained Airport & Airway system in USA
- Even today, full Capital costs are not recovered
- High technological turn over
- Mobile Assets, nearly 75% of total assets
- Highest increase in capital expenditure
- High labor and fuel expenses - ~ 60 % total costs
- Highest average wage
- Nearly 50 % increase in fuel prices in 1978 - 81 & 1990 - 92
- Each % costs USD 160 million to the Airline Industry
- Sensitive to economic fluctuations
- Slower Recovery
- Not possible to reduce production or create inventory
- Close governmental regulation
- Perhaps the most regulated industry