Airline Industry Essay Research Paper airline industryThe — страница 3

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has one of the highestsafety records in the industry, and the company has also benefited from higher ticket prices andincreased passenger traffic. The recent reinstatement of the federal excise tax is not expected to havea negative effect on Southwest demand since it has indicated it will increase fares in only 20 percent ofits markets, but this will affect profitability. The company s strategy is to make up the difference oflower revenue with increased demand through its lower fares (Thorpe, 1996, p. 262). The airline industry has become one of the most competitive segments of our economy. The economicrealities of operation costs versus passenger demand for cost-effective travel has forever changed theface of the travel industry. After deregulation in 1978, the airline industry

was forced to abandon itsservice-oriented philosophy and consider the competitive pressures since they affected the variouscompanies bottom line. Price had suddenly become the benchmark in the airline industry. Companies suchas Southwest and ValuJet recognized the potential for low fares with commensurably low levels of service. With the changing paradigms in the airline industry comes risk, not only to the individualairlines but also the public in general. At what point do the economic pressures of making a profit forthe airlines affect passenger safety? If the trend toward more airline disasters continues and thoseaccidents can be attributed to cost-cutting measures, surely Congress will intervene. The airlineindustry must be disciplined in its approach to solving the economic

pressures, while, at the same timestay focused on safety issues. If the airline industry is to survive and give the consumer choices,passenger confidence cannot be sacrificed for the sake of the bottom line!