Airlines Industry Group Presentation

Group member: Kargan Taylor Zhihao Wang Kenneth Wu Meng Wu Ruoyi Zhao

Part 1: Overview

Part 1: Overview

Market Sector: Services

Industry Sector: Regional airlines

Airlines in Generaloffer scheduled air transportation of passengers and cargoinclude domestic passenger transportation (about 70% of revenue)international passenger transportation (about 20%)mail and freight and others make up the rest of the revenue.The basic operations of airlines include acquiring and maintaining airplanes and airport facilities, acquiring passengers and/or freight, managing staff, and operating flights. The flight equipment (airplanes) that an airline uses is crucial to efficient operations.

5

Domestic Airlines

NationalRegional Internatio

nal

National Airlines Otherwise known as Major AirlinesFocus on long distance routesThey work at major cities in the US as well as international places.Account for 95% of all airline passenger traffic in the USOperating revenue of over 1 billionSimilar to regional AirlinesOffer regular schedules over prescribed routesOffer published timetablesMajor airlines use broadcast, print, and online advertising.

Difference between Major and Regional

7

Major Airlines have the largest number of employees for the different types of airlinesMajor Airlines has a higher passenger seating and more flights than Regional airlines.Regional airlines only cover destinations within the country.

Regional Airlines Characteristics

-Provide air services between small cities -Connect the small communities to major airlines -Operate between points within a specific area of the country -Offer regular schedules over prescribed routes-Offer published timetables-Air flight and services offered to the general public

Large regional

Large regionals are scheduled carriers with operating revenues of $20 million to $100 million.

-Medium regional's follow the same market-niche strategy as the large regional's and operate many of the same type aircraft. Their distinction is simply that they operate on a smaller scale, with operating revenues under $20 million.

-Small regional's, sometimes called commuters, represent the largest segment of the regional airline business. There is no official revenue definition of a small regional. All have less than 61 seats.

Medium regional Small regional

Regional Airlines’ Category have fewer seats than airlines major airlines or national airlines, usually around 70 divided into three sub-groups: large, medium and small

Part 2: Market Value

Market Capitalization for the 3 most current years

单击此处编辑母版文本样式二级三级四级五级

8

Part 3: The Competitive Landscape

Percentage, via market capitalization, airlines industry contributes to the GDP. Industry : Major AirlinesIndustry Market Capitalization: $1314.1 BillionP/E: 10.10ROE%: 38.10Div. Yield%: 1.18Long Term Debt to Equity: 109.00

Top 5 Competitors in the Airline industry (North America/US)

1. Delta Airlines2. United Airlines3. Southwest Airlines4. American Airlines5. US Airways

Market Capitalization: $8.43 BillionEmployees: 76,626Net Income: 1.43 BillionOperating Margin: 0.09Revenue: $36.47 Bill.P/E: 5.84ROE%: 243.27

United Airlines:  

Market Capitalization: $6.7 BillionEmployees: 88,000Net Income: -241 MillionRevenue : $37.38 Bill.Operating Margin: .05P/E:ROE%: -11.64

Southwest Airlines:  

Market Capitalization: $6.9 $BillionEmployees: 46,048Net Income: $495.00 MillionRevenue : $17.02Operating Margin: 0.05P/E: 14.49ROE%: 7.34

Percentage of the overall market cap that is rep. by Delta, United, & Southwest:

$8.43 + $6.7 + $6.9 = $22.03

/ $1314.1 = .0167 %

2 Industry Leaders in Terms of Market Cap:

1. Ryanair Holdings with a Market Cap of $678.8 Billion

2. Tiger Airways with a Market Cap of $582.7 Billion

2 Industry Laggards in Terms of Market Cap:

1. Discovery Air with a Market Cap of $ 38.6 M

2. SkyWest with a Market Cap of $90.4 M

Three companies profiled fall in this competitive landscape

Part 4: Performance

Part 4: Performance

• Southwest Airlines pilots elected a new president to lead its union.

• Unprepared travelers hit with airline fees

• US Airways: Sandy cut profits by $35 million

• American Airlines is planning to put dozens of pilots back to work.

26

Southwest airline stock

have a hugh increase

Delta Airline Stock

Have a little change

US Airline Stock

Have a hugh increase

• The airline announced it will start recalling furloughed pilots, beginning in January. Forty pilots are scheduled to come back the second week of January. The airline says it plans to bring back another forty or so, every month, for the near future. Pilots have been saying for quite awhile that they could use the help.

work cited "SouthWest Airlines Co.." Yahoo Finance n.pag. Yahoo Finance. Web. 29 Nov 2012. <http://finance.yahoo.com/q/pr?s=luv>."Delta Airlines INC." Yahoo Finance n.pag. Yahoo Finance. Web. 29 Nov 2012. <http://finance.yahoo.com/q/in?s=DAL Industry>."Airlines." Hoovers n.pag. Hoovers. Web. 29 Nov 2012. <http://subscriber.hoovers.com.ezproxy2.library.drexel.edu/H/industry360"Airline Transportation 101." Semer n.pag. Delmar Learning. Web. 29 Nov 2012. <http://webtools.delmarlearning.com/sample_chapters/semer_ch01.pdf>.Bonsor, Kevin. "How Airlines Work" 14 June 2001. HowStuffWorks.com. <http://science.howstuffworks.com/transport/flight/modern/airline.htm> 29 November 2012.Yakovlev, Andrey , and Lili Aleeva . Aeroflot’s 2012 calendar. 2012. n.p. Web. 29 Nov 2012. <http://diegoguevara.com/blog/2012/01/16/aeroflot-2012-calendar/>."US Airways: Sandy Cut Profits by $35 Million." N.p., 26 Nov. 2012. Web. 27 Nov. 2012. <http://www.cbsnews.com/8301-505245_162-57554496/us-airways-sandy-cut-profits-by-$35-million/>."American Airlines To Start Recalling Furloughed Pilots." Cbslocal.com. N.p., 26 Nov. 2012. Web. 27 Nov. 2012. <http://dfw.cbslocal.com/2012/11/26/american-airlines-to-start-recalling-furloughed-pilots/>.navyxia, , and . 2012. n.p. Web. 29 Nov 2012. <http://www.nipic.com>.2012. n.p. Web. 29 Nov 2012. <http://www.tigerairways.com/hk/zh/index.php>.

15