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Airlines - US - November 2007

SCOPE AND THEMES
What you need to know
Definition
Resources used for consumer sections
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Airline industry still continuing its recovery after 9/11
Revenue driven by strength of economy; profitability dependent on managing costs and upgrading the ATC system
U.S. carriers return to profitability; customer service problems rise dramatically
Southwest outspends all other airlines on media
Consumers fly, but do not always enjoy it
MARKET DRIVERS AND FUTURE TRENDS
Fuel cost increases limit profitability
Figure 1: Airline fuel costs per gallon, at current and constant prices, 2002-07
Future trend
Air traffic control system needs overhaul—flight delays and crowded planes tarnish air travel’s image
Figure 2: Airline on-time performance, 2002-07 (YTD January-August)
Figure 3: Reasons for air traffic delays in percent of total delayed minutes, 2003-07
Planes are full
Figure 4: Total U.S. passengers emplaned, 2002-07
Future trend
GDP growth influences airline revenue
Figure 5: Total U.S. Real GDP and scheduled airline passenger revenue relationship, 1975-2000
Figure 6: Total U.S. GDP and scheduled airline passenger revenue relationship, 2002-07*
Distribution of income
Figure 7: Per capita disposable personal income, at current and chained 2000 dollars, 2000-06
Figure 8: Distribution of U.S. households, by income, 1999 and 2004
A la carte travel on the rise
MARKET SIZE AND FORECAST
Market size
Figure 9: Total operating revenue of U.S. passenger, cargo, charter and other airline, at current and constant prices, 2002-07
Figure 10: Total operating profit/loss of U.S. passenger, cargo, charter and other airline, at current and constant prices, 2002-07
Passenger airlines
Figure 11: Total operating revenue of U.S. passenger airlines, at current and constant prices, 2002-07
Figure 12: Total U.S. passengers emplaned, 2002-07
Forecast of U.S. passenger, cargo, charter, and other airline operating revenue
Figure 13: Forecast of total operating revenue of U.S. passenger, cargo, charter, and other airlines, at current and constant prices, 2007-12
U.S. passenger airline operating revenue
Figure 14: Forecast of operating revenue of U.S. passenger airlines, at current and constant prices, 2007-12
Forecast factors
SUPPLY STRUCTURE
Key points
Operating revenue increased by 19.3% during 2004-06
All major airlines returned to profitability in first half of 2007
Leading airlines carried 3.6% more passengers in 2006
Performance benchmarks
Companies and brands
Figure 15: Passenger operating revenue of U.S. airlines, 2004 and 2006
Figure 16: Operating profit/loss by U.S. carrier, 2004 and 2006 and first-half 2007
Figure 17: U.S. airlines ranked by number of passengers, 2004 and 2006
Comparative analysis of major airlines by key performance indicators
On-time performance by carrier
Figure 18: U.S. leading airlines, ranked by on-time performance, 12-months ending August 2007
Mishandled baggage complaints by carrier
Figure 19: U.S. leading airlines, ranked by mishandled baggage reports filed by passengers, January-June 2006 & 2007
Consumer complaints by carrier
Figure 20: U.S. leading airlines, ranked by consumer complaints, January-June 2006 & 2007
ADVERTISING AND PROMOTION
Key points
Introduction
Figure 21: Television spot, “Saving On Room Service,” March 2007
Figure 22: Television spot, “Sincerely, Billy Doyle,” June 2007
Figure 23: Television spot, “First Glimpse Of Hawaii,” March 2007
Figure 24: Television spot, “Little Bob,” May 2007
Figure 25: Television spot, “Business Travellers/Advantage Awards,” March 2007
Companies and brands
Figure 26: Media expenditures for leading airlines, 2005-06
 ADVERTISING PROFILES
American Airlines
Figure 27: Television spot, “Business Travellers/Advantage Awards,” March 2007
Figure 28: Television spot, “We know why you fly/little girl talks to dad,” March 2007
AirTran Airways
Figure 29: Television spot, “Employee thinks boss is on conference call,” September 2007
Continental Airlines
Figure 30: Television spot, “Flight attendants say goodbye,” March 2007
Delta Airlines
Figure 31: Television spot, “Deserted airport,” May 2007
Figure 32: Television spot, “More flights and entertainment,” May 2007
Figure 33: Television spot, “Gold Delta SkyMiles credit card,” June 2007
JetBlue
Figure 34: Television spot, “Sincerely, Mark Adleman,” September 2007
Southwest Airlines
Figure 35: Television spot, “Man loses neighbours' pets,” September 2007
Figure 36: Television spot, “Woman won't stop elevator,” August 2007
Figure 37: Television spot, “Airplane spinning wheel,” September 2007
United Airlines
THE CONSUMER: TRAVEL PROFILE
Summary
Domestic travel is popular
Most travelers make their own travel arrangements
Profile of domestic travelers
Figure 38: Profile of domestic travelers, May 2006–June 2007
Profile of air travelers
Figure 39: Profile of domestic air travelers, May 2006–June 2007
Personal or vacation trips by plane
Figure 40: Frequency of vacation/personal travel, by gender, May 2006-June 2007
Figure 41: Frequency of personal/vacation travel, by age, May 2006–June 2007
Figure 42: Frequency of personal/vacation travel, by household income, May 2006–June 2007
Business travel by plane
Figure 43: Frequency of business travel, by gender, May 2006–June 2007
Figure 44: Frequency of business travel, by age, May 2006–June 2007
Figure 45: Frequency of business travel, by household income, May 2006–June 2007
Airlines flown in the past year
Figure 46: Airlines flown in the past year, by age, October 2007
Type of traveler
Figure 47: Type of traveler, by gender, October 2007
Figure 48: Type of traveler, by age, October 2007
Flight arrangements
Figure 49: Who makes flight arrangments, by gender, October 2007
Figure 50: Who makes flight arrangements, by age, October 2007
Figure 51: Who makes flight arrangements, by race/ethnicity, October 2007
Business travel arrangements
Figure 52: Who makes business flight arrangments, by gender, October 2007
THE CONSUMER: FOREIGN TRAVELERS
Summary
One in five adults took a foreign trip by plane in the past three years
Most foreign trips are taken for vacation purposes
U.S.-based carriers are most popular for foreign travel
Profile of foreign travelers
Figure 53: Profile of foreign travelers, May 2006-June 2007
Profile of foreign air travelers
Figure 54: Profile of foreign air travelers, May 2006-June 2007
Reason for foreign trips
Figure 55: Reason for taking a foreign trip, by gender, May 2006–June 2007
Figure 56: Reason for taking a foreign trip, by age, May 2006–June 2007
Figure 57: Reason for taking a foreign trip, by race/ethnicity, May 2006–June 2007
Number of foreign trips
Figure 58: Number of foreign trips taken in past 3 years, by gender, May 2006-June 2007
Figure 59: Number of foreign trips taken in past 3 years, by age, May 2006–June 2007
Airline preferences for foreign travel
Figure 60: Airline preferences for foreign travel, by household income, May 2006–June 2007
Figure 61: Airline preferences for foreign travel, by race/ethnicity, May 2006–June 2007
THE CONSUMER: AIR TRAVEL EXPERIENCES AND ATTITUDES
Summary
Consumers have mixed feelings about air travel
Most air travelers are price-sensitive
Experiences with air travel
Figure 62: Experiences with air travel, by gender, October 2007
Figure 63: Experiences with air travel, by household income, October 2007
Attitudes toward air travel
Figure 64: Attitudes toward air travel, by gender, October 2007
Figure 65: Attitudes toward air travel, by age, October 2007
Figure 66: Attitudes toward air travel, by household income, October 2007
Fear of flying
Figure 67: Fear of flying, demographic profile, October 2007
Willingness to alter air travel plans
Figure 68: Rescheduling reservations, by age, October 2007
Figure 69: Rescheduling reservations, by household income, October 2007
APPENDIX: TRADE ASSOCIATIONS
APPENDIX: SIMMONS COHORTS
Figure 70: Married couples cohorts
Figure 71: Single women cohorts
Figure 72: Single men cohorts

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