ABSTRACT
The primary purpose of aviation operations is the transport of people and goods by air. The International Air Transport Association (IATA) is a trade association that represents airlines around the world to support a safe, secure, and profitable air transport industry. Airlines are structured in different ways, depending on their business models. Ultra low-cost carriers (ULCCs) are a separate category that further unbundles services and undercuts the fares of LCCs. Worldwide, the airline industry has a reputation for being exciting, glamorous, and technologically advanced. Perhaps less glamorous is the reality of slim profit margins and cyclical periods of profits and subsequent losses. Airlines do not typically have ownership over other sectors in the chain. The business cycle describes how services offered will rise and fall, impacted by factors in the global economy. Airlines are directly impacted by the business cycle, with profitable years during expansions followed by challenging periods of losses during recessions.
