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Flight Express

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By Adelinda Simon. Type of airline. Published at Saturday, March 23rd, 2019 - 17:34:19 PM.

Growth rates are not consistent in all regions but countries with a de-regulated airline industry have more competition and greater pricing freedom. This results in lower fares and sometimes dramatic spurts in traffic growth. The U.S. Australia Canada Japan Brazil India and other markets exhibit this trend. The industry has been observed to be cyclical in its financial performance. Four or five years of poor earnings precede five or six years of improvement. But profitability even in the good years is generally low in the range of 2–3% net profit after interest and tax. In times of profit airlines lease new generations of airplanes and upgrade services in response to higher demand. Since 1980 the industry has not earned back the cost of capital during the best of times. Conversely in bad times losses can be dramatically worse. Warren Buffett in 1999 said the money that had been made since the dawn of aviation by all of this country s airline companies was zero. Absolutely zero. 87

Codesharing is the most common type of airline partnership; it involves one airline selling tickets for another airline s flights under its own airline code. An early example of this was Japan Airlines (JAL) codesharing partnership with Aeroflot in the 1960s on Tokyo–Moscow flights; Aeroflot operated the flights using Aeroflot aircraft but JAL sold tickets for the flights as if they were JAL flights. This practice allows airlines to expand their operations at least on paper into parts of the world where they cannot afford to establish bases or purchase aircraft. Another example was the Austrian–Sabena partnership on the Vienna–Brussels–New York/JFK route during the late 60s using a Sabena Boeing 707 with Austrian livery.

Those considering how best to guarantee security to the general flying public should reject the premise that airline security can be guaranteed by the screening of the entire flying population to identify potential terrorists and prevent them from boarding an airplane. This premise needs to be replaced with a new airline security concept and a set of assumptions that have greater probability of achieving the security goals with minimal inconvenience to the airlines and the flying public and stand up to reasonable cost benefit analysis.

The pattern of ownership has been privatized in the recent years that is the ownership has gradually changed from governments to private and individual sectors or organizations. This occurs as regulators permit greater freedom and non-government ownership in steps that are usually decades apart. This pattern is not seen for all airlines in all regions. 86


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