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flight path manufacture Outlook Henry Joyner Senior Vice professorship - Planning, American air hoses March 15, cc7 Airline Economics Today Airline Industry: Post- 9/11 Rec everywherey The US Airline Industry has not fully recovered from 9/11 0.9% US AIRLINE attention REVENUE AS A PERCENTAGE OF GDP 2Q00 = 0.80% 0.8% 2Q01 = 0.72% % GDP 0.7% 4Q07E =0. 63% 3Q01 = 0.61% 0.6% 0.5% 4Q01 = 0.50% 0.4% 97 3Q 97 1Q 9 3Q 8 9 1Q 8 99 3Q 9 1Q 9 00 3Q 0 1Q 0 0 3Q 1 01 1Q 0 3Q 2 02 1Q 03 3Q 0 1Q 3 04 3Q 04 1Q 0 3Q 5 05 1Q 06 3Q 0 1Q 6 07 3Q 07 3 source: two hundred7 estimate establish on consensus of public forecasts US airline industry is AA, AS, CO, DL, NW, UA, US, B6, FL, F9, TZ, WN 1Q Airline Industry Revenue Performance On an inflation- set basis, airline yields have declined over time If history is a guide, sustaining recent yield increases whitethorn prove challenging 16.0 14.0 12.0 10.0 Cents REAL YIELD 8.0 6.0 4.0 2.

0 198 0 198 1 198 2 198 3 198 4 198 5 198 6 198 7 198 8 198 9 199 0 199 1 199 2 199 3 199 4 199 5 199 6 199 7 199 8 199 9 two hundred 0 200 1 200 2 200 3 200 4 200 5 200 6 REAL AND NOMINAL DOMESTIC YIELD, 1980-2006 NOMINAL YIELD Source: manakin 41 data US airline industry is AA, AS, CO, DL, NW, UA, US, B6, FL, F9, TZ, WN 4 Airline Industry Cost Performance Legacy crew cuts have restructured their operations to better compete Ongoing cost reduction is imperative LEGACY AND start COST CARRIER UNIT COSTS (CENTS) EX. FUEL AND finicky ITEMS 7.5 7.1 LEGACY 7.5 7.2 6.7 6.4 6.5 LOW COST 4.5 2000 4.6 2001 4.9 2002 5.0 2003 5.0 5.1 5.2 2004 2005 2006 5 Costs are adjusted for seating density and average trip length Source: Carrier SEC filings; will exhibit variance to inning 41 data Low Cost is B6, FL, WN; Legacy is AA, CO, DL, NW, UA, US Post-9/11 Revenue and Cost Equilibrium The balance between legacy carrier unit revenues and unit costs has improved, but has not reached pre- 9/11 levels LEGACY AIRLINE RASM... If you want to get a full essay, order it on our website: Orderessay

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