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North America Aviation Sectors : A Company and Industry Analysis (July 2008)

  • ID: 655961
  • Report
  • July 2008
  • Region: America, North America, United States
  • 32 pages
  • Mergent
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This report updates the previous North American aviation report, focusing on the markets in Canada and the United States
Current Environment - Key Points
- US airlines flew fuller planes and posted higher revenues, thanks to better-than-expected travel demand and strict capacity discipline
- According to the Air Transport Association of America (ATA), US passenger and freight airlines earned an estimated US$5 billion in 2007
- Soaring fuel prices pushed Aloha Airlines, ATA Airlines, Frontier Airlines, MAXJet Airways and Skybus Airlines into bankruptcy
- Major airlines trimmed their domestic seat capacity to fill up individual flights and firm up prices
- Delta and Northwest agreed to merge to create the world's largest airline, while United and US Airways were in advanced merger talks
- The Federal Aviation Administration (FAA) proposed on March 6 a US$10.2 million fine against Southwest Airlines for flying planes that had missed structural inspections
- Most airlines in Canada saw an increase in passenger traffic, thanks to improved efficiencies, careful capacity management and ongoing cost reductions

Industry Profile - Key Points
- The market capitalization of the top ten US majors (excluding cargo airlines) totaled US$25.146 billion on April 11, with 37.02% of the market cap held by Southwest
- The system operating profit of the seven largest network carriers in the US totaled US$2.39 billion in the third quarter of 2007, according to the Bureau of Transportation Statistics (BTS)
- Collections of US commercial aviation taxes and fees totaled more than US$18 billion in the fiscal year ended September 30, 2007, according to ATA statistics
- Air Canada and WestJet employed 29,582 people in 2007
Their combined fleets totaled 410 aircraft, with Air Canada having the highest number (340)
- The 42 Canadian airports with NAV Canada air traffic control towers reported 1.084 million aircraft take-offs and landings in the first quarter, up 6.8% from 1.015 million in the first quarter of 2007
Market Trends and Outlook - Key Points
- The high costs of jet fuel will prompt carriers to pull flights off schedule and scale back hiring and expansion plans
- Union tensions are likely to intensify as airlines seek merger deals
- More carriers are expected to pair up to offer flights between the US and the EU
- US airlines are coming up with new ways to bolster revenue, to cope with high fuel costs and a lackluster economy
- To offset shrinking share at home, Canadian carriers are focusing on more profitable long-haul routes
- Air Canada is becoming more aggressive at finding new revenue streams and in unbundling its services
- Canadian airlines are steeping up their efforts to tap into the premium business class airline travel market.
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Current Environment - US - Sector Overview - Sector Performance - Industry Heavyweights Current Environment - Canada - Sector Overview - Sector Performance - Leading Companies Industry Profile - US - Industry Size and Value - Industry Highlights - Taxes and Fees Industry Profile - Canada - Canadian Skies - Industry Highlights - Sector Investment Market Trends and Outlook - US - Fuel Worries Mount - Mergers and Alliances Heat Up - US-EU Open Skies Treaty to Shake-Up Air Travel - Airlines are Scrambling to Raise Revenue - Market Outlook Market Trends and Outlook - Canada - Airlines Eye Long-Haul Expansion - More Fees and Charges - Airlines Battle for Business Travelers - Market Outlook Currency Conversion Table Key References The Scope of This Report Comparative Data
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