A strong market for air travel in 2011 produced a 9.5% increase in operating revenue for 2011 vs. 2010. However, high fuel prices for the year caused U.S. airlines to see a 32% decline in overall profits. While revenues are expected to gain 9.9% in 2012, the European fiscal crisis and weak Asian economy could both impact profits for the leading “big four” legacy carriers (which account for more than two thirds of total industry revenue), and which have increasingly turned their attention to more lucrative international travel.

Airline industry revenues are forecast to continue to grow through 2017 based on the current economic indicators. However, the industry as a whole faces many challenges—including increasing competition from low-cost carriers, volatile fuel prices, unpredictable demand, extensive regulatory and legal oversight, and a hefty tax burden.

This report explores external forces shaping the airline industry and the challenges it faces, opportunities for growth, and innovations. This report also provides an in-depth consumer perspective of airlines and airline travel, including but not limited to use of major carriers and brand perceptions, factors driving airline choice, as well as reasons to avoid airlines.