For instance, airlines have responded to the changing
economic landscape by introducing new passenger fees
(e.g., baggage fees), reducing the number of scheduled
flights, and filling vacant seats. Moreover, the recent
series of significant airline mergers has reduced the
number of airlines serving the bulk of the domestic
passenger market from 10 in 2000 to 5 in 2012, which has
dramatically consolidated control of the industry.
These and other airline actions have had a significant
impact on the industry as a whole, as well as the
traveling public. Specifically, airlines have become
more aggressive in adjusting fares and flights to
respond to fluctuations in fuel prices and demand and
have become more profitable as a result. At the same
time, the travel experience for the flying public has
changed both positively and negatively. For example,
there has been a significant reduction in flight delays.
Further details of these changes in business conditions,
airline actions, and their impacts are described in the
report. Ultimately, the trends presented in this report
suggest that the changes in the number of airlines
controlling the industry, fare increases, and capacity
reductions that began in 2008 are not a brief phase, but
rather are signs of a greater shift in the industry that
will remain for years to come.
The airline industry remains one of the most important
in the American economy, with wide-reaching impacts on
consumers and the workforce. However, significant and
frequent challenges to the economic and operating
environment appear to be the new norm for the airline
industry, causing airlines to innovate and take drastic
action to survive. Although the industry is still in
transition, the data in this report suggest that some of
the most significant trends of recent years—including
but not limited to a more consolidated industry with
less competition, fewer flight options for small
communities, and revenue-enhancing baggage and other
fees may continue for the foreseeable future as airlines
further improve their adaptability to changing market
forces. (see
report)
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