BUPO 5100 Us-Airlines-Case-Study

The case discusses the U.S. Airline Industry since the establishment till now. Two main periods in the history of industry, regulation and deregulation, are explained briefly. The strategies which were adopted with the deregulation period and the performance of the major companies are the other issues that are discussed in this case. 1. Assess the overall financial performance of the US airline industry during the past 20 years. Between 1978 and 1981 deregulation, oil shock, world-wide recession and Air Traffic Controllers’ strike have caused massive losses and decrease in net incomes. Moreover, higher operating leverages have caused bankruptcy and then merger and acquisitions were established. In 1990s The Gulf Crisis brought increase in oil prices and this caused negative net incomes for 4 years. In 2001 September 11 has caused huge increase in oil prices and security measures which decrease in demands and customer loyalty, and end up with negative net incomes for 5 years.