ABSTRACT
In the USA, a Commission reported to the President and Congress in August 1993 on the state of the airline industry. Airlines have devoted much management time to the formation of alliances, some tactical, but many of a more strategic nature which require the blessing of the regulatory authorities. The recovery of Asian economies, and the Asian airlines, from the region’s 1997 financial crisis has been remarkable. Airline financial results are highly sensitive to small changes in either costs or revenues because of the historically high level of operational and gearing that has prevailed. World airline financial results reflect the difference between the break-even and actual load factors. Once the airline has committed to operate the flight, all the medium-term costs are fixed, as well as airport charges, fuel, ATC and certain flight related variable costs. Many airlines have been trying to reduce the fixed cost burden by outsourcing and hiring part-time staff to meet traffic peaks.
