Airline Industry Analysis

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Media Scan - Airline Industry

In 2019, weather-related issues have resulted in the disruption of flights operated by Southwest Airlines and Delta Air Lines. Software outages have led to passengers of Delta Air Lines and JetBlue Airways experiencing flight delays in 2019. Newark Liberty International Airport closed on June 16 and 29, 2019 after the tires of United Airlines jets blew up during the landings.

Southwest Airlines

Delta Air Lines

  • On January 28, 2019, USA Today reported that Delta Air Lines would be canceling 170 flights departing Atlanta due to snow and icy conditions.
  • On June 19, 2019, CNBC reported that a technical issue that prevented Delta Air Lines’ passengers from booking, checking in, and boarding had led to some flight delays in and out of Atlanta.

United Airlines

  • On June 5, 2019, KLTA 5 reported that a power outage at Los Angeles International Airport had resulted in United Airlines canceling 2 flights and delaying 19 flights.
  • On June 16, 2019, Reuters reported that over 400 flights (operated by different airlines) in and out of Newark Liberty International Airport were canceled or delayed after a United Airlines jet’s tries blew up during the landing.
  • On June 21, 2019, Business Insider reported that United Airlines had suspended its flights from Newark, New Jersey to Mumbai, India after a United States drone was shot down over Iran’s airspace.
  • On June 29, 2019, Business Insider reported that Newark Liberty International Airport had closed temporarily when a United Airlines jet blew up its tires while making an emergency landing due to hydraulics problems.

JetBlue Airways

  • On April 29, 2019, Business Insider reported that a software outage caused by a failure of reservation software Sabre had resulted in JetBlue Airways’ customers experiencing difficulties with booking or check-in via the airline’s website, mobile app, and airport kiosks.
  • On May 14, 2019, Business Insider reported that several JetBlue Airways’ flights were delayed due to another software outage from Sabre.
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Wish List Items for Consumers - Airline Industry

Seven wish-list items that consumers would like to see in airline travel include wider seating, luggage tracking, automatic flight re-booking, biometric identification, more overhead luggage space, and the ability to purchase last-minute conveniences using an airline app.
  • A 2018 Nielsen survey found that 93% of fliers want wider seating.
  • Of the more than 1,000 participants in the 2018 International Air Transport Association (IATA) Global Passenger Survey, 56% want the ability to track their luggage throughout their entire journey.
  • In the event of a travel disruption, 53% of 2019 passengers want their flight re-booked automatically, compared to 47% in 2018.
  • According to the 2019 IATA Global Passenger Survey, 46% of air travelers want to use biometric identification instead of paper identification like passports, up from 45% in 2018.
  • Space on the airplane is an issue concerning passengers as well, as 46% of survey participants in 2019 want more availability of overhead space for carry-on luggage, up from 42% in 2018.
  • In 2018, 51% of passengers would like to have their luggage delivered directly to their final destination, but this percentage decreased to 46% in 2019.
  • In 2019, 27% of airline passengers want to be able to purchase last-minute conveniences such as additional bags, upgrades, and lounge access through an airline app.
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Insights and Trends - Airline Industry

Seven trends surrounding the current state of the airline industry include robots and autonomous vehicles, upguaging, profitability over comfort, cybersecurity, sustainability and CSR, rise in in-flight connectivity, and biometrics for passenger processing. These trends show increasing use of technology such as AI and machine learning by US airlines to increase processing times and maximize efficiency. It also depicts the need to maximize profit through upguaging and the increase in seat density of their aircraft.


  • The use of robots at airport terminals are becoming more rampant within the airline industry. The robots serve to engage with customers and optimize efficiency. Due to the growth of artificial intelligence (AI) and machine learning, robots can learn and expand their knowledge with frequent interaction. However, the use of AI extends beyond robots alone to chatbots, virtual assistants, and autonomous vehicle technologies, among others.
  • "Robotics could have a big role to play in the baggage handling sphere, providing faster processing, and maximizing efficiency. As more airports adopt this trend, the technology will play a crucial part in strengthening the relationship between passengers and airports."


  • More air carriers are shifting towards using larger aircraft to be able to accommodate more passengers per flight. "Upguaging has been an economic winner for mainline airlines, and it has helped some regional carriers survive a pilot shortage that forced them to increase pilot pay drastically."
  • Airlines provided 18.5% less flights in 2017 than in 2005 due to upguaging.
  • Some airlines exhibiting this trend include Delta Airlines, United Airlines, and American Airlines.


  • Many airlines are seeking profitability by increasing the number of seats in their aircraft. In most cases, this has lead to a reduction in passenger comfort. They have also become more disciplined with additional flights. As a result, the higher number of seats per plane has led to in full planes with less room for individual passengers.
  • "Between 2007 and 2017, while the number of domestic U.S. air travelers increased by 9.2%, the average number of passengers per flight jumped from 69 to 91, BTS statistics show."


  • There is increasing dedication of airlines to invest in cybersecurity due to the rising importance of protecting data and systems from being accessed without proper authorization. "Experts at a recent Air Transport IT Summit agreed that cyber-attacks on airlines are inevitable, stating that an airline must have security strategies in place to reduce the damage.
  • The cybersecurity budget in the airline industry increased from 7% in 2017 to 9% in 2018.
  • About 73% of respondents from a study by SITA consider regulatory compliance and data privacy regulation as a top priority in the airline industry.
  • "According to PwC’s 2015 Global Airline CEO Survey, 85% of airline CEOs view cybersecurity as a significant risk, likely reflecting the highly sensitive nature of flight systems and passenger data."
  • In the US, transportation companies and air carriers, especially the aviation sector are including "more advanced cybersecurity programs that align with the National Institute of Standards and Technology (NIST) standards."
  • The CEO of Delta Air Lines said that cybersecurity ""would be one of the things that I spend my time more focused on than I care to be."


  • Airlines are increasingly paying attention to sustainability and their roles in society. In a bid to reduce their rate of carbon emissions, more airlines are attempting to use bio-fuel rather than the standard jet-fuel.
  • Also, the airline industry is currently operating in an environment where CSR provides a competitive advantage, as it contributes to the long-term value of the airline. Airlines realize that CSR improves customer loyalty due to the social and environmental impacts of their activities.
  • Airlines in the US have succeeded in carrying 34% more passengers between the years 2000 and 2017, without emitting more carbon dioxide.
  • "Since 2009, US airlines have been active participants in a global aviation coalition that has committed to 1.5% annual average fuel efficiency improvements through 2020, to achieve carbon-neutral growth in international aviation in 2021."
  • Delta Airlines and American Airlines are both supporters of alternative fuel investment. Jetblue exhibits CSR.


  • More airlines are providing in-flight connectivity, as a way of satisfying customers' dependency on the internet and also to generate more revenue.
  • A report by Routehappy showed a 17% increase in airlines that provide in-flight WiFi.
  • "Delta Air Lines started a two-week pilot test on May 13 that includes free WiFi on around 55 domestic short, medium, and long-haul flight segments a day."


  • Airlines in the US have begun to turn to biometrics as a way of improving passenger processing and customer experience.
  • Biometrics speed up various airport processes by allowing passengers to complete check-in and go through security or passport control without having to deal with a human agent.
  • The number of flight passengers in airports is increasing. In 2017, there was a 3.2% increase in passengers in North America.
  • The United States has the busiest airlines and passengers that fly the most in the world.
  • Delta Airlines launched "the first biometric terminal in the US, in partnership with US Customs and Border Protection (CBP), Hartsfield-Jackson Atlanta International Airport (ATL), and the Transportation Security Administration (TSA), recently."
  • American Airlines also makes use of biometrics at the Los Angeles International Airport.
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Insights and Trends - Consumer Trends: Airline Industry

Some consumer trends surrounding air travel are ancillary products; sustainable aviation; legacy carriers improving their customer satisfaction ratings; carriers tightening their policy on emotional support animals; biometrics; the rise of the digital consumer; and customers’ dissatisfaction with loyalty programs. The following information presents details about each trend.

Consumers are Willing to Pay More for Sustainable Aviation

Why it is a consumer trend

  • A 2019 UBS survey discovered that one in five people in the U.S., France, England and Germany said they reduced the number of flights they took over the past year citing air travel's impact on the climate as a reason.
  • In 2017, a study investigated the public’s willingness to pay more for an airplane ticket that guaranteed the use of biofuels and discovered that consumers were willing to pay 13% more for it. The study also reported that positive sentiments were associated with the biofuel option, while negative emotions were correlated with the traditional option.
  • Meanwhile, another study examined their attitudes regarding paying for a new airport to be developed in their city. In general, participants were more willing to pay for the new green airport and reported anger and disgust at having to pay for a new airport that was not eco-friendly.
  • The studies’ findings are in line with broader research that suggests that 87% of consumers will have a more positive image of a company that supports social or environmental issues, while 88% are more likely to be loyal to the company that supports environmental issues.
  • A 2019 survey conducted by Salesforce revealed that 71% of consumers in the U.S. believe that a company’s ethics matter more than they did a year ago, while 56% are actively seeking to buy from environmentally sustainable companies.


  • In 2018, United Airlines declared that it would reduce its carbon emissions by 50% by 2050. In June 2019, the airline also launched a “Flight For The Planet”, which was advertised as the most eco-friendly commercial flight of its kind in the history of aviation.

Low-Cost Carriers Still Growing But Legacy Airlines are Catching Up

  • Low-cost carriers are still favorites among consumers, but legacy airlines are starting to improve their satisfaction rates, a new development after years of falling way behind LCCs.
  • LCC capacity grew by 13.4%, while the overall industry growth rate was 6.9%, and accounted for 21% of the global capacity in 2018. The consumer behavior and LCCs led legacy airlines to adopt new models to give consumers more options, such as creating “basic economy” fares comparable to tickets from the LCCs.
  • Most of the major carriers have introduced the unbundled Basic Economy fare, which used to be a domain of ultra-low-cost carriers such as Spirit Airlines and Allegiant Air. Recently, the trend has continued as the concept expanded from domestic to cross-Atlantic flights.

Why it is a consumer trend

  • Legacy airlines are catching up with LCCs, especially regarding customer satisfaction. Legacy airlines showed a 22 points improvement in customer satisfaction, while LCCs improved by just 6 points since 2018.
  • Michael Taylor, Travel Intelligence Lead at J.D. Power explains that “While low-cost carriers have historically had the highest levels of customer satisfaction in our study, due to a strong sense of value for money among customers, that line is starting to blur as traditional carriers improve their services and operations.”


Pet Owners are Influencing Airlines and Airports

  • Airlines claim that passengers are taking advantage of the provision that allows support animals, intended for people with disabilities, by getting documentation from doctors to avoid paying for the fees for animal transport. Due to several incidents, airlines are now enforcing stricter rules for pets traveling in the cabin.
  • Pet owners are not only influencing the airlines; a recent survey by Airports Council International-North America predicted that pet relief areas would be the second fastest-growing amenity, losing only to nursing stations.

Why it is a consumer trend

  • The number of passengers traveling with their pets exponentially increased in the last few years. Delta alone carried 250,000 support animals in 2017, a 150% increase from 2015.


  • As a result of the alleged abuse, Delta Air Lines banned service and emotional support animals under four months and all animals from flights longer than eight hours in 2019. Southwest, United Airlines, American Airlines, and JetBlue are tightening their policy on emotional support animals as well.

Biometrics to Improve Customer Experience

  • Over 30 U.S. airports are already using biometrics as part of the boarding process.

Why it is a consumer trend

  • Border control and immigration are the areas where most passengers state being dissatisfied, as reported by the 2019 IATA survey. Forty-six percent of passengers surveyed by AITA reported that biometric identification replaced the passport as their favorite travel document. This trend is particularly strong among male frequent flyers in the 35-44 age group.


  • Delta recently partnered with the U.S. Customs and Border Protection (CBP), Hartsfield-Jackson Atlanta International Airport (ATL) and the Transportation Security Administration (TSA) to unveil the first biometric terminal at ATL Terminal F. (S4)
  • American Airlines is planning to expand biometric boarding to 75 international gates by the end of 2019. The company recently launched the system for customers departing from Dallas Fort Worth International Airport (DFW), its largest hub.

Rise of the Digital Consumer

  • Passengers are accustomed to seamless and personalized experiences from digital retailers and expect the same experience when purchasing and traveling. PwC reports that this expectation is "raising the bar for airline distribution—and it is raising costs for airlines as they compete for bookings."

Why it is a consumer trend

  • Digital solutions are particularly important to millennials, as they prefer to pay via digital wallets. Meanwhile, 51% of consumers used their mobile devices to check-in.
  • There is also a surge in consumers who prefer to receive notifications and book flights via apps. ACSI reports that in 2019 consumers felt mobile apps were the best part of the airline experience, tied with checking in.
  • Travelers are looking for flawless mobile experiences, native payments and exceptional customer service. For instance, 43% of bookings in China are completed on a mobile device.


  • According to J.D. Power Travel App Satisfaction Study, JetBlue’s app was the favorite among the 12,000 passengers surveyed, due to the clear way information is provided.

Customers Still Don’t Understand Loyalty Programs

  • Travelers are drifting away from loyalty programs and preferring unique experiences. The complexity of loyalty programs is also undermining the success of some programs.
  • Apart from seat comfort and overhead storage, loyalty programs is the area consumers are most dissatisfied in 2019, as reported by the ACSI.

Why it is a consumer trend

  • J.D. Power discovered that even thought satisfaction is much higher when members understand how to earn and redeem their points, 45% of loyalty program members say they do not fully understand how to redeem rewards and 43% say they do not entirely understand how to gain miles or points.
  • The study stated that this is the third year in a row that airline loyalty program satisfaction is “hampered by a widespread lack of understanding of how to extract the most value from the programs.”
  • Satisfaction with the loyalty program is directly related to brand engagement. For instance, satisfaction increases when staff members acknowledge a member’s status during the booking, check-in, departure or flight.
  • Apps may contribute to satisfaction as those who use the airline’s mobile app are more satisfied than members who don’t use the app.


Customization and Ancillary Products

Why it is a consumer trend

  • Customization is appealing to both affluent and budget-conscious travelers, as it enables them to create their own packages based on their needs.
  • Deloitte reports that the cheap fares encouraged flyers to add value back into the flying experience as some consumers are noticing they want the extra services. Airlines are also personalizing the entire travel journey outside of the flight. Services like priority boarding, lounge access, fast tracks, local transport, and hotel services are becoming more common.
  • The “a la carte air products” are driving consumers to purchase their flights directly through the airline website, as opposed to an online travel agency (OTA) as it is easier to shop and analyze options directly with the company than on an OTA or metasearch site.
  • A 2018 survey unveiled that only 2% of passengers described not acquiring any extra services or paying for extra fees.


  • Eighteen out of every 100 dollars collected by Southwest in 2018 were from ancillary revenue. JetBlue sells the “Even More Space” feature. This package gives consumers extra legroom, early boarding, early access to overhead bins, and access to the carriers’ service “Even More Speed” which enables expedited security in the departure city.
  • In June 2019, Emirates introduced a new unbundled fare for business class travelers. One of the reasons for the move is to improve the value-for-money for corporate travel policies.

Research Strategy

To uncover some of the consumer trends surrounding air travel, the research team leveraged news articles, industry reports and analysis from think thanks such as Deloitte and PwC. One challenging aspect of the report was the circular nature of the airline industry regarding consumer trends.
We were surprised by how many of the trends are not exactly novelties, but developments of older trends. Most innovations are regarding technological aspects and more suitable for the general trends already presented, while the consumer trends are ongoing developments of older trends that are now entering a new stage. This is particularly true for ancillary revenue, as it is a part of the aviation industry for more than a decade, but recent developments made it a trend for both Deloitte and PwC. The same for LCCs and legacy carriers.
We included loyalty programs as a trend as consumers’ dissatisfaction with the programs is a persistent trend for the past three years. The pet trend was included because consumer behavior is making airlines change their policy and the exponential rise in flyers with pets.
Biometrics, digital consumers and sustainable aviation are trends noted by most sources as affecting the industry.
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Most Trusted Airlines - Airline Industry

The top five most consumer trusted or rated airlines in the United States are JetBlue Airways, Delta Air Lines, Southwest Airlines, Alaska Airlines, and United Airlines. More details are below.

Top Five Consumer-Trusted Airlines in the U.S.

  • According to Skytrax's World Airline Awards, which bases its rankings on customer votes from around the world, the top five U.S. airlines are the following:
    • JetBlue Airways — This airline is number 40 on the top 100 list of the best global airlines, but it is the first U.S.-based airline to make the list.
    • Delta Air Lines — This airline is number 41 on the top 100 list of the best global airlines, but it is the second U.S.-based airline to make the list.
    • Southwest Airlines — This airline is number 47 on the top 100 list of the best global airlines, but it is the third U.S.-based airline to make the list.
    • Alaska Airlines — This airline is number 54 on the top 100 list of the best global airlines, but it is the fourth U.S.-based airline to make the list.
    • United Airlines — This airline is number 68 on the top 100 list of the best global airlines, but it is the fifth U.S.-based airline to make the list.

Research Strategy

To find the five most consumer-trusted or rated airlines in the United States, we found the Skytrax list of the World's Top 100 Airlines in 2019, which is based on consumer votes from around the world. We assumed that the airlines that rank high on the list get higher trust ratings from customers. We then took the first five U.S.-based airlines to make the list to provide the five most consumer-trusted or rated airlines in the U.S. The votes are based on more than 50 categories across cabin service, ground/airport, and onboard product. Voters rated each category on a 1-5 scale and airlines with the highest scores earned higher places on the list. More than 300 airlines were evaluated and Skytrax takes care to ensure the results are the Passenger Choice Awards.
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Greatest Awareness - Airline Industry

The five global airlines with the greatest mindshare across major competitors based on social media voice share are British Airways, KLM, Delta Air Lines, American Airlines, and EasyJet. Additional details are below.

Overall Awareness Among Airlines

British Airways

  • According to Awario's 2019 Social Listening Report, British Airways is the airline that received the most mentions on social media over three months' time (229,312).
  • British Airways was selected because it had a 15.7% share of social media voice out of 52 analyzed airlines between May 15 and August 15, 2019.


  • According to Awario's 2019 Social Listening Report, KLM received the second-highest number of mentions on social media over three months' time (205,498).
  • KLM was selected because it had a 14.1% share of social media voice out of 52 analyzed airlines between May 15 and August 15, 2019.

Delta Air Lines

  • According to Awario's 2019 Social Listening Report, Delta Air Lines received the third-highest number of mentions on social media over three months' time (165,832).
  • Delta Air Lines was selected because it had an 11.4% share of social media voice out of 52 analyzed airlines between May 15 and August 15, 2019.

American Airlines

  • According to Awario's 2019 Social Listening Report, American Airlines received the fourth-highest number of mentions on social media over three months' time (161,135).
  • American Airlines was selected because it had an 11.1% share of social media voice out of 52 analyzed airlines between May 15 and August 15, 2019.


  • According to Awario's 2019 Social Listening Report, EasyJet received the fifth-highest number of mentions on social media over three months' time (148,016).
  • EasyJet was selected because it had a 10.2% share of social media voice out of 52 analyzed airlines between May 15 and August 15, 2019.

Awareness Among U.S.-Based Airlines

Research Strategy

To identify the five airlines with the greatest mindshare across major competitors, we began by searching directly for brand awareness scores. We found a Brand Index report, but it was only for UK airlines. A research report was found that discussed customer-based airline brand equity, but again, it was only for England-based airlines. Since it was unclear if we should use U.S.-based airlines or if other countries' ranks were satisfactory, we assumed that because other projects in the study were primarily based in the U.S., we decided to continue to search for global or U.S.-based statistics.

During this direct search, we came across Awario's 2019 Social Listening Report, which examined the number of social media mentions for 52 global airline brands. We decided to use this as the metric for brand awareness because the mentions are directly related to how aware consumers are of these airlines, as they would not be mentioning them on social media if they weren't aware of them. Therefore, we determined the brands with the highest number of mentions has more brand awareness or mindshare than those with lower numbers of mentions. Note that the study included a sentiment portion in its final rankings, which identified British Airways, American Airlines, and KLM as the three most popular airlines. We did not take sentiment into account because awareness would include both positive and negative mentions.
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Struggles - Airline Industry

The struggles airlines face when targeting customers include cybersecurity, digital transformation, global politic and economic situation, delayed response, as well as terrorism and security.


  • Along with the rise of advanced technology, cybersecurity remains to be an issue that affects the airline company and its customers. Cybersecurity refers to the "body of technologies, processes, and practices designed to protect networks, devices, programs, and data from attack, damage, or unauthorized access".
  • Cybercriminals may get access to the airline's database and steal customers' data, including financial information, for commercial purposes. Attackers may also threaten the airline's cybersecurity through ransomware attacks, phishing attacks, insider threats, and many others. Due to this vulnerability, customers may feel reluctant to choose a particular airline as their transportation option.
  • Every airline must make sure the security of its database to gain customer trust and successfully market its products and services.
  • British Airways, a British-based airline, suffered from a huge cyberattack that affected 380,000 transactions between August 21 to September 5 in 2018. This company was fined £183 million due to its data breach incident. It also made a promise to spend £6.5 billion over the next five years to offer new aircraft, new cabins, new catering, new lounges, WiFi on-board, and new routes for better user experience.

Digital Transformation

  • According to a study, there are about 3.2 billion active mobile social media users and 3.9 billion people who actively use mobile internet across the globe in 2018.
  • The rise of mobile devices and social media users also impacts the airline marketing strategy to adapt to time development. Digitalization may improve productivity, enhance operational efficiency, and increase profits. Airlines are required to digitalize the paper processes to smart devices and mobile apps or create a social network for customer interaction to create a better user experience.
  • Another study reported that Millennials prefer personalization to generate a better user experience.
  • According to a study conducted by Frost & Sullivan, digitalization in the airline industry may increase the incremental value of $5 to $10 for every passenger.
  • To overcome the digital challenge, Qantas Airline, previously dubbed as the most digitally ready airline, has attempted to digitalize its platform and created two programs to "drive the culture change element" called 'Imagine' and 'Target CX'. Qantas also stated that it is inspired by Spotify's model.

Global Politic and Economic Situation

  • Other than a transportation option, airlines also act as bridges that connect one country to another. Therefore, airlines can be stuck in the middle of global political and economic situations.
  • According to the CEO of The International Air Transport Association (IATA), the ever-changing global politic and economic shift increases the risk in the airline industry's growth. For instance, Trump administration bans people from particular Muslim-majority countries and prohibits the use of laptops during flights from some airports in the Middle East and North Africa.
  • Due to this issue, Qatar Airways sought help from the IATA and the International Civil Aviation Organization (ICAO) to find an appropriate corridor for this company and other airlines to reach Qatar.

Delayed Response

  • Delayed response from airline companies may drastically lower customer satisfaction toward the airline service. Therefore, chatbots are needed in the airline industry due to their efficient and quick response to customers' inquiries.
  • A study conducted in 2018 reported that passengers were fairly satisfied with the airline services although their flights were delayed, as long as they were properly notified about it.
  • A chatbot is a software that enables a customer to interact through a live chat interface without the need of a staff. Chatbots may scan the keywords in a customer's request or inquiry and help with his/her needs.
  • Aeromexico, a Mexican-based airline company, use chatbot technology to increase user experience and report that the average customer resolution time through chat lowers from 16 minutes to 2 minutes.

Terrorism and Security

  • The action of global terrorism has continued to be predominant and airlines may be vulnerable and targeted easily. If not prevented or administered correctly, this may induce panic among the airline passengers.
  • For instance, the actions of terrorism in Paris and Brussel have affected travelers to become more cautious to fly to certain areas in the world. They are also concerned about choosing planes as their transportation option.
  • Safety and security of the passengers are the biggest challenges that every airline should prioritize. Airline companies must be able to enhance their security without compromising passenger comfort and their services.
  • easyJet reportedly lost $34.6 million after the Paris and Brussel bombing incidents in which hundreds of passengers decided to cancel their flights. Therefore, they attempted to lower their ticket prices to attract customers.
  • American Airlines succeeded in detecting a disturbance in their airplane's navigation system caused by their former mechanic. After being interrogated, he admitted that he had tampered with the airplane's navigation system and, thus, was fired and arrested.

Research Strategy

To determine five struggles that airlines face when targeting consumers, we began our research by looking through marketing reports, expert blogs, publications, and news articles from various trusted sources, such as Forbes, Times, and BBC. Our research team found that any precompiled information related to the challenges in the airline industry mainly covered internal struggles in the company, such as fuel cost and financial strategy. On the other hand, the information related to the marketing struggle in the aviation industry was very limited. Airline companies may keep this information confidential and avoid their marketing strategy to be disclosed due to the competitive environment in the aviation industry. However, we managed to collect enough information to answer the inquiry. We also used advanced search engines to gather the most updated information, such as News Lookup and Google News. This research's answer was quite straightforward and did not need any triangulation.
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Regulatory Issues - Airline Industry

There are several current regulatory issues facing airlines. Changes in regulations due to pilot fatigue, environmental regulations, privacy, and security have all created concerns for airlines. These issues all require the attention of the airlines to minimize the ongoing effects.

Pilot fatigue

  • As medicine and science have evolved, so has the understanding of fatigue and the impact it has on the body. It is a pressing issue for pilots, given the responsibility they have for the passengers, and the devastating consequences of a mistake.
  • Regulatory authorities, in consultation with airlines and pilots, will update the rules around pilot fatigue, minimum rest periods, maximum flying hours, total hours, and the like, based on recommendations from researchers in this area.
  • The airlines are left to deal with the implementation of the new regulations, along with the associated compliance costs, which creates some serious issues.

Reason it is an Issue

  • Fatigue and its consequences are still being realized. Optimal scheduling is being refined. Generally, there is a trend toward shorter flight times and longer rest periods. This trend creates tension between the pilots and the airlines. Pilots consistently argue that improvements are not sufficient, while airlines deal with potential pilot shortages and costs associated with the changes.
  • From the perspective of the airline, regulatory issues around pilot fatigue, and changing pilot schedules create several concerns. The Canadian regulations around pilot fatigue were updated early last year. The estimated cost to the airlines, as a result of the changes, is forecast at S338 million over the next 15 years, and this is almost all directly attributable to changes to flight-schedule arrangements.
  • With pilot shortages already an issue for an increasing number of airlines, the schedule changes put tension on an already bending system. Using the Canadian situation as an example, had the research recommendations been fully adopted, there would be 8,000 less cargo and passenger planes flying in Canada. From the airlines' perspective the implementation of the new schedules will mean that 30% more pilots are required to staff routes.
  • There are issues created when flights are delayed, or changed because pilots still have to complete the required downtime, even getting delayed in traffic on the way to the hotel can have an effect, as airlines have to address the uncertainties of flight, and flight schedule upheaval to align with new pilot flight times.
  • The research is evolving. Airlines' understanding of fatigue is still not complete. Pilot fatigue will continue to be a pressing issue for airlines for the foreseeable future.


  • When similar regulations came into effect in the US in 2014, JetBlue was forced to cancel hundreds of flights due to poor weather. This action led to further delays when it was unable to staff the rescheduled flights. Due to the new pilot fatigue regulations, Jetblue made a public statement explaining, “Even as airports began to reopen, newly launched FAA regulations on pilot duty times caused delayed flights to quickly turn into canceled ones.”
  • American Airlines, representing the leading airlines, also made a public statement saying Jetblue was not alone in its concerns. It said, “We have heard anecdotally from some member carriers that the rule change was a contributing factor, and we will continue to work closely with the FAA to identify specific issues related to the implementation of the rule and propose solutions in response.”
  • Ultimately the airlines adapted, but it remains an ongoing point of tension between pilots and airlines.

Environmental Regulation

  • Carbon emissions and airlines go hand in hand, and the travel industry has one of the worst records regarding carbon emissions. Governments and the public are placing pressure on airlines to address the issue. Regulations have been developed that require airlines to take responsibility for their carbon footprint.
  • Historically, airlines have been protected, with several regulatory bodies giving them additional time to comply with minimum emission agreements and carbon trading requirements. With the extensions about to expire, airlines are finding environmental regulation, an increasingly difficult issue to tackle.

Reason it is an Issue

  • For airlines, there is a considerable cost in complying with new environmental regulations. This will inevitably result in decreased profitability.
  • There is an additional problem developing in response to the airlines' failure to take responsibility for their carbon footprint. A new movement is slowly growing, "flight shaming." This action sees consumers cancel travel due to guilt over the carbon footprint left behind, and it is a big issue.
  • A recent UBS study of Americans and Europeans found 20% of consumers had canceled a flight in the last year due to feeling guilty about the planet. If these rates continue, the expected growth in airline travel will halve, resulting in a decreased profit of $350 million over the next 15 years.
  • The regulations around carbon emissions are a multi-headed issue for airlines. They have no option but to comply, as consumer attitude is unyielding on this issue, and there are clear indications that they will take action for the environment if the airlines don't.
  • The costs associated with compliance, and the ongoing navigation of the regulatory framework, means this will remain an issue for airlines in the foreseeable future.


  • United Airlines is an example of an airline that has attempted to address this issue, partnering with two biofuel developers to make fuel from agricultural waste. The primary concern is the cost of biofuel, in comparison to traditional fuels. United is already testing one blend of biofuel and jet fuel on its Chicago to Los Angeles route.
  • United Airlines has also made efforts to reduce its overall carbon footprint and has reduced carbon emissions from its airlines by 45% since 1990, partly through more efficient flight plans.


  • In the years following 9/11, the US changed the regulatory requirements around border security. The rules are tougher, and airlines are expected to play a role in enforcing them.
  • The US is not the only country that has changed border regulations. China and South Korea have also strengthened their border regulations. All countries are more aware of the issues around border security.
  • Part of the responsibility for enforcing these new security measures has fallen broadly on the shoulders of airlines. Compliance costs are a given. However, airlines are increasingly being required to adopt various procedures and processes to ensure passages comply.
  • Delays caused as a result of security regulations need to be accounted for and operating procedures amended to avoid breaching regulations.

Reason it is an Issue

  • In 2017, the US implemented new security regulations at its borders. Once implemented, airlines were required to take greater responsibility in determining passenger flight eligibility, which meant airline staff needed training to address security issues on bordering. There was also a requirement that passengers complied with the minimal luggage in cabin policy that the US included in the new security regulations.
  • The additional screening completed by airlines will affect 325,000 passengers on 2,000 flights each day. More training for staff will be needed. There are increasing concerns from airlines regarding the effect the delays in screening and processing are causing through flight delays.
  • It also has the potential to be an ongoing issue internally, with airlines needing to reevaluate the advice they give customers around arrival at the airport and country-specific immigration.
  • Flight delays and disruptions have the potential to impact flight attendants and other airline staff, as frustrations around delays and new restrictions mount.


  • The increasing compliance issues and the financial cost of allowing a person to fly without the appropriate paperwork is a real issue for airlines. An increasing number of airlines, are utilizing IATA, to address this issue proactively. The airlines are purchasing subscription services with the company.
  • Boarding lists are vetted by relevant authorities, and the airlines receive a notice if someone should not fly. This process ensures passengers have country eligibility and avoids the financial costs associated with getting it wrong for the airline.

Privacy Regulations

  • Privacy is an ongoing issue for everyone. With ongoing cyberattacks, there is increasing regulation around the protection of data. The airlines are having to comply with these regulations, and there is an increasing onus on airlines to protect the data of consumers.
  • Last year, the European Union introduced regulations that placed increased responsibilities on airlines concerning how they collect, use, manage, and store personal information. The implications for non-compliance are significant, a fine up to EURO20 million or 4% of worldwide turnover. Regulations in other jurisdictions are similar.

Reason it is an Issue

  • The complex nature of airlines and air travel means there are multiple levels at which airlines are expected to comply. The information must be maintained, as the regulations set out for airlines flying in and out of Europe. There is also a second layer in the regulations applying to information collected in Europe, such as booking data, even though the particular airline may not have a presence in Europe.
  • The cross-boundary nature of air travel means that airlines are to follow different regulations, depending on the countries they operate in, which creates a complex regulatory environment. Airlines need to give this environment increasing attention to ensure compliance.
  • The increased security regulations require airlines to collect more personal information from customers to comply with border control security requirements, which means the amount of personal information stored by airlines is growing. At the same time, increased regulation is being introduced around the control and storage of the information.
  • Although the collection, storage, and use of personal data appear relatively simple, it is not the case. Ongoing compliance requires the continual assessment and refinement of data systems and continuous careful navigation of the regulatory framework.


  • Recently, British Airlines has had a shock awakening regarding the seriousness of failing to comply with the new regulations. A cyberattack diverted British Airlines' website to a fraudulent third-party site, which enabled cybercriminals to harvest around 50,000 sets of data.
  • The regulatory authority emphasized the importance of protecting personal data and the ongoing obligations for the airline holding the information. They fined British Airlines GPD 183 million ($235 million). Although British Airways is expected to appeal the fine, it has left airlines in doubt regarding the obligations placed on them.

Research Strategy

We initially reviewed a range of regulatory frameworks, industry publications, and media articles to determine the current regulatory issues affecting airlines. Once we developed a list of concerns, we reviewed the sources mentioned above to determine the impact they were having on airlines. The issues we selected are longstanding and ongoing. They are some of the most complex problems currently facing airlines. Multiple sources referenced them as issues for the airline industry on numerous occasions.
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Biography - Gary Clayton Kelly: Chief Executive Officer (CEO) of Southwest Airlines

Gary Clayton Kelly studied at the University of Texas, got married to Carol and has two daughters. He has been working with Southwest Airlines since 1986 and now serves as the CEO and Chairman. Recently he has been mentioned in several articles, including Fox Business regarding his contribution to the PAC.

Education and Family Life

  • Kelly completed a Bachelor of Business Administration in Accounting at the University of Texas.

Hobbies and Interests

Social Causes or Charities

Social media accounts

Professional Information

Board Membership

News Articles

  • Fox Business had an article on Kelly making contributions to the political committee, PAC.
  • Kelly was mentioned in a story on the airline, He was reported saying that Southwest will be looking into diversifying the fleet in 2020.
  • In an article published in the Alcalde, Kelly has said to have remarked that in a room full of footballers that he does not like to lose. He was there to make a motivational speech on communication.
  • The Dallas Morning News did an article in which Kelly has indicated that he believes all the investigation surrounding the Boeing 737 will be completed soon.
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Biography - Ryan Green: Senior Vice President, Chief Marketing Officer at Southwest Airlines

Currently, Ryan Green is working as the Managing Director of Customer Strategy & Development, Vice President of Marketing, Chief Marketing Officer, and as the Senior Vice President & Chief Marketing Officer. He received his bachelor's degree from Texas A&M University in Marketing. Below are the explicit findings and detailed methodology.

Biography - Ryan Green: Senior Vice President, Chief Marketing Officer at Southwest Airlines

Personal Information:


Family Life

  • His family consists of five members: Him, his wife, Mary, and three sons, namely, Collin, Brady, and Will.
  • The proudest moment in his personal life was holding his three boys for the first time.

Hobbies and Interests

Social Causes or Charities he Supports

  • Although there is no publicly available information that Ryan Green supported/supports any social causes or charities, we came across an old report from Southwest Airlines detailing social causes and charities that their employees were involved with.
  • According to the report, Southwest Airlines' employees "regularly volunteer their time and donate to the causes that are closest to their hearts."
  • In 2010, Southwest Airlines employees volunteered for over 80,000 hours to charities across the country and had a direct impact on charitable organizations within their community. Also, they donated to other Southwest Airlines employees who were in need.
  • Southwest Airlines Employees Catastrophic Assistance Charity (SWAECAC) gives employees the opportunity to make tax-deductible donations to a collective catastrophic assistance fund through fundraisers and payroll deductions. These funds are dispersed to coworkers who apply due to a personal crisis or need.
  • In 2010, Southwest Airlines employees collectively contributed nearly $1.1 million to SWAECAC.

Social Media Accounts

  • His LinkedIn profile.
  • Ryan Green does not have an account on Twitter, Facebook, or Instagram.

Professional Information:

Prior Work Experience

Current Responsibilities at Southwest Airlines

  • His current responsibilities include overseeing and providing direction to many facets of the organization that are important elements for growing the brand and driving revenue.
  • This includes brand health, advertising and media efforts, the Rapid Rewards loyalty program and ancillary revenue development, the digital strategy for southwest and mobile channels, as well as driving the customers' experience efforts across the company.
  • In his role, he is tasked with fostering brand loyalty for one of the America's most admired companies while looking toward future growth and revenue opportunities.
  • According to an article published by The Drum, Jan 2019, Ryan was appointed as a Chief Marketing Officer of Southwest Airlines, and his role is to "give directions on a range of issues relating to the company’s brand, advertising, and media relations."
  • As CMO, he has a wide scope of responsibilities, including giving insights and analysis in these areas 1) go-to-market efforts, 2) digital platforms, 3) loyalty programs, 4) partnerships, 5)products, and 6) customers' experience.

Boards he Serves On

Recent News Articles

1. "Ryan Green brings his and Southwest’s brand to Mays " - March 4th, 2019

2. "Southwest Airlines names Ryan Green as new CMO amid restructuring" - 29 January 2019

  • Southwest Airlines appointed Ryan Green as the Chief Marketing Officer in Jan. 2019, to provide "direction on a range of issues relating to the company’s brand, advertising, and media relations."

Research Strategy:

To find the personal and professional biography of the CMO of Southwest, Ryan Green, we initially relied on his profile on LinkedIn and his information available on the company's website, and other relevant articles. Here, we could find almost all the information pertaining to him; however, we could not find any details showing if he supported any social cause or charities.

We also looked for his profiles on Facebook, Twitter, and Instagram, but we could not find Ryan's accounts on the mentioned platforms; he only has an account on LinkedIn. We went through these platforms to see if he supported/supports any social cause or charities. Unfortunately, we could not find any relevant information even on his Linkedln account to answer that question.

Next, while checking the news articles related to Ryan Green, we also tried to check if we could get any clue of his connection with any of the social causes or charities that he might have supported ever. Although we were able to find the two recently published news articles related to Ryan Green, no information could be found if he supported any social causes or charities. We also searched for a source that could have all his biography information that satisfies the research criteria, which we couldn't find earlier. This search only took us to a paid source from Boardroom Insiders containing almost all the desired information related to his personal and professional life. Still, since it is a paid source, we could not access the details.

Although there is no publicly available information that Ryan Green supported any social causes or charities, while searching, we came across an old report from Southwest Airlines detailing social causes and charities that their employees were involved with. This shows that Mr. Green being at the senior position in the company; he must have supported the social causes and is involved in charity programs. Also, this could be one of the reasons he has not been mentioned in any separate charity program or social cause that he supports; because the company as a whole is involved in this.

Although the above-mentioned strategies were unsuccessful in providing the information if Ryan Green supported any social causes or charities, we could establish an indirect relationship of Ryan Green with charity programs that he might have supported or supports in his present company (Southwest Airlines).
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SWOT - Southwest Airlines

Southwest Airlines leads the United States airline industry in many aspects. Its strengths are its unmatched profitability record, its excellent hospitality and customer service, its people and its industry-leading culture, its point-to-point network and low fares, and its efficient and reliable operations, while its weaknesses are its limited international network, its limited number of partners, its poor relations with mechanics, and its substantial exposure to the Boeing 737 Max grounding. Flying to Hawaii and near international destinations, codesharing, and forming additional partnerships all present opportunities for growth, but the airline must be wary about threats posed by ultra-low cost carriers, the Boeing 737 Max grounding, and several other factors.


  • According to Gary Kelly, chief executive officer of Southwest Airlines, Southwest Airlines's "single greatest strength and most enduring long-term competitive advantage" is its people. Southwest has over 58,000 full-time employees.
  • Southwest is the biggest domestic air carrier in the United States as far as domestic originating passengers are concerned. Its share of the market stands at 23%, and it leads in 24 of the 50 biggest metro areas in the country.
  • Southwest's balance sheet is the best in the industry, and the ratings Southwest has received from all credit rating agencies (i.e., Standard & Poor's, Moody's, and Fitch Ratings) are all investment-grade.
  • The airline has the distinction of being the only domestic airline with a decades-long track record of profitability. It has been profitable for 46 consecutive years now, and it has been returning shareholder capital for several decades already. Airfinance Journal named Southwest Airline of the Year in May 2019.
  • It is recognized as a top employer. Not only did it rank third on Indeed's Top-Rated Workplaces in 2019, it also figured among Forbes's America's Best Employers for New Graduates, WayUp's Top 100 Internship Programs, and Forbes's Best Employers for Women in 2019.
  • Its airline rewards program is top-notch, with U.S. News & World Report recognizing Southwest's program as one of the Best Airline Rewards Programs. Last April 2019 at the Freddie Awards, InsideFlyer Magazine recognized Southwest's Rapid Rewards program as the Program of the Year. The program was also given the Best Loyalty Credit Card, Best Customer Service, and Best Airline Redemption Ability awards.
  • Southwest identifies its unmatched profitability record, its excellent hospitality and customer service, its people and its industry-leading culture, its point-to-point network and low fares, and its efficient and reliable operations as its competitive differentiators.
  • Southwest has its 'Transfarency' philosophy that assures "customers are treated honestly and fairly, and low fares actually stay low." Among marketing carriers, it has been ranked the highest for customer satisfaction for "25 of the past 28 years" by the Department of Transportation. Southwest also received five awards at the 2019 TripAdvisor Traveler's Choice Awards last April 2019.
  • The airline leads the industry in terms of sustainability efforts. It was able to record an improvement in jet fuel efficiency of 32.8% between 2005 and 2018, and it was able to recycle 3,757 tons of material in 2018.



  • Given that many of its competitors have already entered into code-sharing agreements, capacity purchase agreements, and global alliances to expand their route network, Southwest has the opportunity to do the same.
  • It recently partnered with global distribution systems Travelport and Amadeus, but it can benefit from additional partnerships. Unlike its competitors, Southwest has not been keen on establishing relationships with other companies in the past 50 years.
  • Given that the FAA has already approved Southwest's request to fly to Hawaii, Southwest now has the opportunity to push through with its growth plan. According to CEO Gary Kelly, Hawaii is a big opportunity that Southwest has to prioritize over international destinations.
  • Southwest has kept costs low by sticking to short routes and flying only Boeing 737, but near international destinations such as Latin America and the Carribbean present an opportunity for growth.
  • With its new reservations system, Southwest is in a better position to explore codesharing.


  • Southwest continues to be negatively impacted by the decision of the FAA to ground all aircraft of Boeing 737 Max. The year-to-date impact of the emergency order on Southwest through September 30, 2019, has so far been estimated at $435 million.
  • The negative impact is expected to continue since flight schedule adjustments arising from the order extend all the way to March 6, 2020. Southwest is asking for compensation for damages from Boeing, but no final agreement has been reached yet.
  • Southwest identifies the following as its risk factors: unfavorable economic conditions; volatile fuel prices; information system failure, breach, delay, or disruption; issues with single engine and aircraft suppliers; terrorist threats or attacks; airport inefficiencies; unfavorable litigation results; and negative publicity, especially on social media.
  • Being a part of the airline industry, it is especially susceptible to deleterious events such as natural disasters, acts of terrorism, poor weather, and economic recessions.
  • The rise of ultra-low cost carriers (ULCCs), which offer unbundled services, poses a threat, as price-sensitive travelers may switch to these carriers.
  • Southwest's reputation could be damaged, as news of two of its pilots live streaming video from a plane's lavatory to the cockpit has surfaced recently.

Research Strategy

We identified the airline's strengths, weaknesses, opportunities, and threats by scouring the airline's website, press releases, reports, and presentations, and examining airline industry reports and recently published news articles that covered the airline. By reading through numerous sources, we were able to gain a better understanding and a holistic view of the airline.
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Executive Summary - Airline Industry

This report is a summary of the main findings of the study conducted on US airlines. The summary includes 2019 news media articles, the wish list items of consumers, industry trends, consumer trends, names of the most trusted airlines, airlines with the greatest mindshare, struggles faced by the industry, issues with regulations, the biography of two C-level executives and a SWOT analysis of Southwest Airlines.

Media Scan

Wish List for Consumers

  • Consumers have several things on their wish lists in airline travel. Among them are more overhead luggage space, wider seating, luggage tracking, biometric identification, automatic flight re-booking, and the ability to purchase last-minute conveniences using an airline app.
  • Approximately 93% of fliers want wider seating 56% want the ability to track their luggage throughout their entire journey, 53% want their flight re-booked automatically, compared to 47% in 2018, and 46% of air travelers want to use biometric identification instead of paper identification like passports, up from 45% in 2018.
  • In addition, 46% of passengers want more availability of overhead space for carry-on luggage, up from 42% in 2018, 51% would like to have their luggage delivered directly to their final destination, was 46% in 2019, and 27% want to be able to purchase last-minute conveniences such as additional bags, upgrades, and lounge access through an airline app.

Industry Trends

  • The airline industry is affected by many factors. Some trends now affecting the industry include upguaging, robots and autonomous vehicles, profitability over comfort, sustainability and CSR, cybersecurity, biometrics for passenger processing and rise in in-flight connectivity.
  • These trends demonstrate drives the need for technology such as AI and machine learning to maximize efficiency and the increase processing times. It illustrates the need to increase sales and profits.
  • Some airlines leading with these trends include Delta, United Airlines, American Airlines, and JetBlue.

Consumer Trends

  • Consumers, by their choices, are demonstrating a number of trends. These include the willingness to pay more for sustainable aviation, customers being pulled towards legacy carriers as they improve customer satisfaction, pet owners influence on airlines, improved customer experience through biometrics, increase in digital consumers, customers drifting away from loyalty programs, and the appeal of customization and ancillary products.
  • These are trending as customers prefer sustainable aircraft over those negatively impacting the environment. They are also choosing airlines that provide high levels of satisfaction or value for money and are gravitating towards airlines with digital technology as it is more convenient.
  • Some airlines leading in these trends include United Airlines, Southwest, Delta, American Airlines, and JetBlue.

Most Trusted Airlines

Greatest Awareness


  • In relation to struggles faced by airlines targeting customers, cybersecurity, digital transformation, global politic and economic situation, delayed response, as well as terrorism and security are among the many.
  • Criminals in cyberspace sometimes hack into the databases of airline. As a result of this, customers may be apprehensive to choose a particular airline as their option for air travel. Secondly, with the rise of digitization, airlines are having to digitize their paper processes, create mobile apps and make changes in other areas. Qantas Airline created two programs to drive the culture of change.
  • Factors such as politics and economics are hindering the growth of airlines as they sometimes travel between countries caught up in political battles. An example of this is the ban imposed by the US on people from Muslim-majority countries. Qatar Airways sought help from IATA to address this issue.
  • Airlines taking a long time to respond to customers is another reason airlines may struggle as it impacts on customer satisfaction. Then there are terrorism and security concerns that will impact whether a customer travels to areas with those issues and this will affect airlines in those countries. Aeromexico implemented chatbots to address the delay in response, and American Airlines successfully stopped a possible incident caused by an employee (since fired).

Regulatory Issues


Gary Clayton, Southwest Airlines

Ryan Green, Southwest Airlines

  • Ryan Green studied at Texas A&M University between 1995 and 1999 where he earned a bachelor's degree in Marketing. He is married to Mary and has three boys.
  • Currently, Green is working as the Managing Director of Customer Strategy & Development, Vice President of Marketing, and as the Senior Vice President & Chief Marketing Officer. He received his bachelor's degree from Texas A&M University in Marketing. He joined Southwest in 2002.
  • He is a member of the Dean’s Advisory Board at Mays Business School.

SWOT Analysis

  • Southwest Airlines's biggest strength is its people as it has over 58,000 employees and is the largest domestic carrier in the US. Its balance sheet is the best and ratings are the highest in the industry. The airline is one of the most profitable in the industry in the US.
  • Its routes are less extensive than the others in the industry and are plagued by maintenance issues. The Union believes that Southwest has the lowest ratio of aircraft to mechanics.
  • The airline has the opportunity to enter into code-sharing agreements, global alliances and capacity purchase agreements as well as extend its routes. The FAA has approved its request to offer flights to Hawaii which means new passengers.
  • Southwest has historically maintained low costs by sticking to shorter routes. In addition, Southwest has updated its reservation system which means the opportunity to codeshare.
  • The decision to ground all Boeing 737 has threatened the financial position of the airline as it has cost the airline $435 million. Other threats include unfavorable litigation results, unfavorable economic conditions, airport inefficiencies, volatile fuel prices, information system failure, delay, disruption or breach, issues with single-engine and aircraft suppliers, terrorist threats or attacks, and negative publicity.
  • Additionally, the increase in the popularity of low-cost carriers is threatening the airline. These carriers offer unbundled services, and travelers on a budget may prefer these carriers over airlines such as Southwest.


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