Overview

The airlines industry provides air transportation for passengers and cargo by using aircraft such
as airplanes and helicopters. The origins of flight date back to 400 B.C., when the Chinese
invented the kite, which was used not only for fun but also to test the weather, and for later
development of balloons and gliders. In the 1480s, Leonardo da Vinci was fascinated by the
thought of flight and drew pictures and designs of his theories of flight and flying machines. The
first recorded flight was in 1783, when two French inventors flew the first hot air balloon, and the
Wright brothers successfully flew the first airplane in 1903.

The airlines industry is structured into three main components: commercial, general, and
military. Commercial aviation includes national carriers such as Delta and American, and
regional carriers like GoJet and SkyWest Airlines. Commercial airlines may also focus on other
areas of business, such as crop dusting, fighting forest fires, and rescue operations. According
to the trade organization Airlines for America, commercial aviation helps drive more than $1.5
trillion per year in U.S. economic activity and more than 11 million U.S. jobs. General aviation
includes personal and business or executive flights and flight instruction. The subsectors of the
airlines industry include operations, maintenance, marketing, and finance divisions.

Air transportation may be scheduled or nonscheduled. Most commercial airlines operate

according to a schedule, flying regular routes, even if the plane isn't full. Air carrers that don't
operate based on a schedule usually fly during offpeak hours, and usually have more flexibility
regarding choice of airport, flight times, and load factors. Nonscheduled carriers offer charter
flights of passengers, cargo, or specialty flying services. In 2014, Hartsfield-Jackson Atlanta
International Airport in Atlanta, Georgia, was ranked the busiest airport in the United States, with
more than 46 million airline passengers enplaning there. Memphis International Airport in
Tennessee was ranked number one in the U.S. for the transporting the most cargo, with
departing flights having carried nearly 23 trillion pounds of freight and mail.

Jobs within the industry include aircraft mechanics and service technicians, airline pilots,
copilots, flight engineers, flight dispatchers, cargo and freight agents, flight attendants, and
reservation and transportation ticket agents and travel clerks. The Bureau of Labor Statistics
reported that in December 2015, the air transportation industry employed nearly 455,000
workers. In 2014, the top 10 passenger airlines that employed the most workers in the industry
were United, Delta, American, Southwest, US Airways, JetBlue, Envoy (previously operated as
American Eagle), Alaska, SkyWest, and ExpressJet.

The History of Airline Industry

Since the birth of flight in 1903, air travel has emerged as a crucial means of transportation for
people and products. The hundred-plus years following the invention of the first aircraft have
brought about a revolution in the way people travel. The airline business is a major industry,
relied upon by millions not only for transportation but also as a way of making a living.
Early 20th Century
Airplanes were around the first few years of the 20th century, but flying was a risky endeavor
not commonplace until 1925. In this year, the Air Mail Act facilitated the development of the
airline industry by allowing the postmaster to contract with private airlines to deliver mail. Shortly
thereafter, the Air Commerce Act gave the Secretary of Commerce power to establish airways,
certify aircraft, license pilots, and issue and enforce air traffic regulations. The first commercial
airlines included Pan American, Western Air Express and Ford Transport Service. Within 10
years, many modern-day airlines, such as United and American, had emerged as major players.
Mid-20th Century
In 1938, the Civil Aeronautics Act established the Civil Aeronautics Board. This board served
numerous functions, the two most significant being determining airlines' routes of travel and
regulating prices for passenger fares. The CAB based airfares on average costs, so because
airlines couldn't compete with each other by offering lower fares, they competed by striving to
offer the best quality service. If the CAB found an airline's service quality was lacking on a
certain route, it would allow other carriers to begin operating on that route. In this environment,
established airlines enjoyed an advantage over startups, as new carriers found it difficult to
break into existing routes. The Federal Aviation Agency, now known as the Federal Aviation
Administration, was created in 1958 to manage safety operations.
Deregulation
In the mid-1970s, Alfred Kahn, an economist and deregulation advocate, became chairman of
the CAB. Around the same time, a British airline began offering exceptionally inexpensive
transatlantic flights, awakening a desire for U.S.-based airlines to lower their fares. These
influences led to Congress passing the Airline Deregulation Act of 1978, ushering in an era of
unencumbered free market competition. The CAB disbanded a few years thereafter.
Late 20th Century
Post-deregulation, new carriers rushed into the market, and new routes directly connected cities
previously accessible only via a string of layovers. Fares dropped as competition and the
number of customers increased. A 1981 air traffic controllers strike brought a temporary setback
to the growth, which continued throughout the 1980s. Some of the major carriers who had
dominated the skies during the middle portion of the century, such as Pan American and TWA,
began to collapse in the wake of competition. Such carriers disappeared completely following
the Gulf War and subsequent recession of the early 1990s. Surviving airlines rode out the
recession and returned to record profitability by the late 1990s.
21st Century
In 2001, the industry dealt with the effects of another economic downturn, as business travel
decreased substantially while labor and fuel costs increased. The events 9/11 greatly magnified
the airlines' issues, leading to a sharp decline in customers and significantly higher operating
costs. Losses continued for years; the industry as a whole didn't return to profitability until 2006.
A relatively stable period followed, although controversies arose over service quality and
passenger treatment in terms of flight delays, particularly those involving planes waiting on the
runway. In 2010 and 2011, the U.S. Department of Transportation issued a series of rules
 mandating that the airlines provide adequate modifications for passengers in extenuating
circumstances.

FINANCE

Airlines are making more money than ever — but they're facing a mountain of problems

 Benjamin Zhang

 Apr 15, 2018, 8:57 AM ET

Branden Camp / APPassengers stuck at Hartsfield-Jackson Atlanta International Airport after an
electric fire cut power to the entire airport for 12 hours.

 These days, airlines are becoming safer, more efficient, and more profitable
with savvier management teams.

 However, the problems that plague the airline industry have not gone away.

 The global nature of the industry makes it uniquely vulnerable to a multitude of

elements ranging from insufficient infrastructure to disease epidemics to
politics.

The state of the airline industry is strong. Around the world, the number of people flying increased by
6.6% in 2017.
In fact, the world's 20 busiest airports, alone, saw roughly 1.5 billion passengers pass through its
terminals last year, trade group Airports Council International reported.

Consolidation, coupled with relatively affordable fuel prices and increasingly savvy management teams
has resulted in record profits for the industry.

However, the airline business is not without its problems. Any cursory look at today's new will turn up
any number of stories about dissatisfied customers or some facet of the industry under threat.

Even as profitability remains solid, the problems that plague airlines have not gone away. In fact, they
have actually become more complex.

A former airline CEO once jokingly responded to my question about areas of concern in the future with
"What aren't we concerned about?"

It's a fair response. The airline industry for all of its power and prestige is unique in the sheer number of
factors that could negatively affect its business.

Over the past couple of years, airlines have experienced major disruptions caused by everything
from electrical fires to catastrophic disease outbreaks.

Then there are also the challenges caused by the world's ever-shifting economic and political climates.
And let's not forget about the issues created by changes in our actual climate.

The vulnerability of airlines to this multitude of factors has to do with the global nature of the business.
The very things that make airlines so interesting and alluring are also the same things that threaten its
well-being.

Here's a closer look a handful of the challenges that plague the airline industry:
Congestion

Flightradar24

Not only are the skies over the US congested with air traffic, the airports from which the planes operate
are also bursting at the seams.

The increase in the number flyers along with the airlines' strategic shift towards increasing the frequency
of flights, means more planes and more passengers.

This results in crowded airport terminals and an increase in the number of delays.

"At no time is the peril of this strategy more exposed than when the weather goes bad," author and
commercial airline pilot Patrick Smith wrote in a blog post. "In years past, snow or thunderstorms meant
moderate delays and perhaps a cancellation or two. These days, a half inch of powder or a line of
cumulonimbus brings the entire system to its knees."
Terrorism

AP

Even though the frequency of terrorist acts targeted at airliners has gone down, incidents like the shoe
bombers and the tragic events of 9/11 serve as a reminder they remain a substantial and persistent threat.

As a result, airlines and security services around the world have to remain vigilant. Over the past 15
years, security screening procedures have become increasingly stringent. This has resulted in longer
checkpoint wait times and complaints from the traveling public.
Passenger comfort.

Dawid Cedler/Flickr

In many respects, the industry's search for greater profitability has been to the detriment of passenger
comfort.

For investors, the lower the unit costs the better. For airlines, an effective way to reach that target is to
stuff more seats into each plane. In addition, airlines have become much more disciplined when it comes
to flooding the market with additional flights. The capacity discipline along with a greater number of
seats per plane has resulted in full planes with less room for individual passengers.
Politics

Associated Press/Manuel Balce Ceneta

Since airlines serve as a bridge between nations or even as a flying ambassador for its homeland, it is all
but inevitable that they wind up in the middle of political scuffles.

Recent examples include the Trump administration's ban on travelers from certain Muslim majority
nations and its ban on laptops in the cabins of flights from selected airports in the Middle East and North
Africa.

There's also Qatar's dispute with its Persian Gulf neighbors that saw its national airline banned from a
couple of its most lucrative markets.

Strife between nations usually results in a hit to the operations and profitability of airlines.
Technology

AP/Shizuo Kambayashi

Technology has been great for airlines. Biometrics is going to be a changer for airport experience. While
hybridization is expected to usher in a new age of flight. Technology has already helped revolutionize
everything from in-flight entertainment to freeing flights crews from their cumbersome flight manuals.

However, as the airline industry and the infrastructure that serves it becomes increasingly dependent on
technology, it's also going be even more vulnerable. Insufficient investment in technology infrastructure
over the past decade has resulted in a spate of computer outages that can cripple an airline's operations for
days on end. With the growing threat of cybercrime, the airline industry will have to work much harder to
stay ahead of the curve.
Labor relations

Getty Images/Scott Olson

Every airline executive will tell the most important part of his or her company are the people. It's true, an
airline's employees are its lifeblood. Which is why poor labor relations can cripple an airline both
financially and operationally.

With the proliferation of smartphones and social media, the actions of airline employees are under the
microscope more than ever. Thus the actions of a few employees can have a major effect on the airline.

However, as the airline industry learns to run leaner, its business and labor model is evolving as well. As
a result, employees at major airlines in the UK, France, and Germany have gone on strike in recent years.
Pilot shortage

Benoit Tessier / Reuters

As airlines around the world expanding their fleets, everyone is looking for people to do the flying. But
there doesn't seem to be enough people around to fill those jobs. After all, it takes a tremendous amount
of time and money to train a pilot.

Thus, the pilot shortage is real and some airlines are beginning to feel the pinch. According to Patrick
Smith, it is regional carriers that are bearing the brunt of the shortage. However, if this trend continues, it
may one day affect mainlines carriers as well.

One airline executive clarified the situation by saying there isn't a shortage of pilots, there's a shortage of
good, qualified pilots.
Fume events

Shutterstock

Fume events occur when toxic smoke or odors from the plane's engines find their way into the cabin. "A
toxic fume event can result in immediate incapacitation and have a long-term adverse impact, and it can
affect everyone on board," Allied Pilots Association president Captain Dan Carey said in a statement.

However, the long-term effects of fume event remain largely unknown.

According to the APA, the union that represents American Airlines' 15,000 pilots, there have been 20,000
of these toxic fume events over the past 10 years.
Pets

CNBC

Over the past couple of years, the sharp increase in the number of animal-related incidents on board
planes has increased dramatically. Delta Air Lines reported an 84% spike since 2016.

Many attribute this to the widespread abuse of emotional support and service animal privileges by the
flying public.

Recent incidents include the mauling of a passenger by an emotional support dog on a Delta flight and
the death of a puppy on board a United Airlines jet after it was placed in the overhead compartment.

In addition, there are questions regarding the viability of the airline industry's animal cargo handling
procedures after a spate of recent pet deaths.
Fuel prices

Jeff Fusco/Getty

Fuel is an airline's greatest cost. The industry's new-found profitability has certainly been helped by a
sharp decline in oil prices in 2014. However, crude prices are rebounding. Even though it may not reach
its previous heights, airlines will have to learn how to survive in a higher cost environment.
Climate Change

Julie Jacobson / AP

In 2017, Hurricane Harvey devastated Texas. Stuck in the middle of the storm was United Airline's mega
hub in Houston and roughly 10,000 of its employees. Fortunately, the airline and its employees were able
to get back on their feet. But as our climate changes, the number of extreme weather eventshas increased
dramatically.

Event like Hurrican Harvey or Super Storm Sandy that hit New York/New Jersey in 2012 will no longer
be the exception, but the norm.

Air blue

Airblue Limited (styled as airblue) is a privatePakistani low-cost airline with its head office on the
12th floor of the Islamabad Stock Exchange (ISE) Towers in Islamabad, Pakistan.[1] Airblue
operates scheduled domestic and international flights to Oman, Saudi Arabia and the United
Arab Emirates
The airline was established in 2003 and started operations on 18 June 2004 with three
leased Airbus A320-200 aircraft serving Karachi–Lahore and Karachi–Islamabad with three daily
flights in each direction.[2] The airline was inaugurated in 2004 by Prime Minister Zafarullah
Khan Jamali.

Airblue Airbus A320-200

A now retired former Airblue Airbus A340-300

During the first year the airline became very popular,[3] which allowed the airline to compete
directly with the flag carrier Pakistan International Airlines and the two other private carriers,
flying more than 400,000 passengers in the first year with a load factor of over 90%.[4] This
allowed the airline to expand into more cities in Pakistan
including Peshawar, Quetta and Nawabshah.[2]
On 14 August 2005 Airblue launched its first international flight from Karachi to Dubai.[2]On
June 4, 2007, Airblue launched its inaugural flight to Manchester using the Airbus A321.[5]
Airblue changed its IATA code from ED to PA in June 2012, the new code originally belonged to
the defunct and once iconic carrier Pan American World Airways. In 2011 the airline launched
service to Istanbul’s Sabiha Gokcen Airport - a route which was ultimately terminated.
In June 2012, Airblue finalised an agreement to acquire one Airbus A320 and two leased A340-
300s for existing and new international routes. It was also looking at various types of turboprop
aircraft for new domestic routes but this plan was eventually dropped. The A340s joined the
fleet in October 2012, enabling the airline to strengthen its Manchester route with nonstop flights
as well as launch a second UK destination Birmingham in September 2013, and connect both
stations with Lahore. The A340s later also flew to the Middle East. Technical issues related to
the aircraft eventually led to them being phased out by January 2014; they had been leased for
a five-year term. UK operations also ended with Birmingham being dropped after just three
months' service and Manchester ending in January 2014.
CabinEdit

Interior of an Airblue Airbus A320-200

All aircraft in the fleet have a 3-by-3 layout in an all economy cabin; and have overhead video
screens. Airblue formerly had a business class section, but dropped it due to exogenous
economic factors.

eTicketingEdit
Airblue was the first airline in Pakistan to introduce e-ticketing, wireless check-in and self check-
in kiosk facilities. The airline also uses Sabre, a ticket distribution system.
Frequent flyer programEdit
The Airblue frequent flyer program is called "Blue Miles". Passengers are able to initially start on
the base level where sign up is free. Once passengers earn enough miles, there are upgrades
to the Blue Card followed by the Platinum Card. In May 2009, the airline formed an alliance
with Faysal Bank to offer credit cards.[14]
LoungesEdit
Airblue inaugurated its own premium lounge at Jinnah International Airport, Karachi in
November 2008. It has since been closed.[when?] Named the Blue Lounge International, it was
designed for business class passengers, credit card holders and privileged customers. The
lounge offered Internet facilities, cable television, newspapers and magazines, massage chairs
and a snack bar. It was located in the international terminal of the airport.[citation needed]
Cargo operationsEdit
Airblue has launched e-Cargo service to cater to air freight markets of Pakistan, the United Arab
Emirates and the United Kingdom.[15]According to a press release, e-Cargo will broaden the
base of cargo and permit certified agents to book freight directly o
Airblue serves the following destinations as of August 2018,[6] the list also includes former routes.

Country City Airport Status Refs

Muscat
Oman Muscat International Terminated [7]
Airport

Faisalabad
Pakistan Faislabad International Terminated [8]
Airport
 Gwadar
Pakistan Gwadar International Terminated [9]
Airport

Islamabad
Pakistan Islamabad International Focus city [7]
Airport

Jinnah
Pakistan Karachi International Hub [7]
Airport

Allama Iqbal
Pakistan Lahore International Focus city [7]
Airport

Multan
Pakistan Multan International [7][10]
Airport

Bacha Khan
Pakistan Peshawar International [7]
Airport

Quetta
Pakistan Quetta International Terminated [8]
Airport

Shaikh
Rahim Yar Zayed
Pakistan Terminated [7]
Khan International
Airport

Sialkot
Pakistan Sialkot International Terminated [7]
Airport

King Fahd
Saudi
Dammam International Terminated [7]
Arabia
Airport

King
Saudi Abdulaziz
Jeddah Focus city [7]
Arabia International
Airport
 Prince
Mohammad
Saudi
Medina bin Terminated [7]
Arabia
Abdulaziz
Airport

King Khalid
Saudi
Riyadh International [7]
Arabia
Airport

Sabiha
Gokcen
Turkey Istanbul Terminated [11]
International
Airport

United Abu Dhabi

Arab Abu Dhabi International Focus city [7]
Emirates Airport

United Dubai
Arab Dubai International Focus city [7]
Emirates Airport

United Sharjah
Arab Sharjah International [7]
Emirates Airport

United Birmingham
Birmingham Terminated [12]
Kingdom Airport

United Manchester
Manchester Terminated [13]
Kingdom Airport

Services

Airblue Airline Miscellaneous Services

The airline offers cargo services and has recently started an e-cargo initiative to cater to the air
freight markets of Pakistan, the United Kingdom and the UAE.

Air blue offers a frequent flyer program for its customers, giving exciting discounts and other
awards to those who travel with them on a regular basis. In 2009, it joined hands with Faysal Bank
to offer reward points on their Air Blue Card.
It has made good use of technology and provided multiple customer service points along with a
fully functional and operational contact center. Customers can take advantage of Air Blue’s
exceptional customer services and get information in real time regarding any Air Blue flight status.

Online Air Blue Agent

Air Blue is the first airline in Pakistan to offer e-ticketing, wireless check-in and self-check-in kiosk
facilities, however, it still has conventional offices and agents as well. The airlines use of internet
technology allowed checkin.pk to be a virtual Air Blue agent, providing an innovative platform
where customers can easily see the entire air blue flight schedule from the easy-to-use interface
of the checkin.pk website. Being an online virtual agent, checkin.pk allows you to make an Air
Blue reservation and even get an Air Blue ticket.

Airblue Cheap Domestic Flights

Through checkin.pk it is easy to compare the many flights by Airblue within the country and also
see the air blue ticket price. This will allow you to choose and even book a flight according to your
budget.

Air blue Cheap International Flights

Besides checking local flights you can also check the flight schedule of international destinations.
You can check the Air Blue ticket rates through the online checkin.pk interface and also make
reservations.

Airblue Airline flights to Pakistan

If you live in Dubai or some other city that Airblue operates from you can easily check flights that
are travelling to your desired city in Pakistan and make an air blue booking right from the website.

Air blue Airline flights from Pakistan

If you wish to visit an international destination and wish to take advantage of air blue’s economical
airfare then all you need to do is search on the checkin.pk website. Just mention your current city,
the city you wish to travel to and the date you need the flight on and all air blue flights (if any) will
show up for the given criteria.

As of August 2017 the Airblue fleet consists of the following aircraft:[16]

Airblue Fleet

Passengers Notes
Aircraft Total Orders
Economy

Airbus
3 — 180
A320-200

Airbus
5 — 220
A321-200

Total 8 —

 SWOT analysis of air

Blue

 Mission Statement
 Airblue will be recognized as the most progressive enterprise in the transportationbusiness. We
will offer our customers cost effective transportation service withingeographical a
reas and market segments that can benefit from our services and willinsure a return o
n investment and growth rate consistent with current managementguidelines.


 Vision Statement
 Our vision is to make Airblue the most admired airline in the world.* Ensuring safety comes fi
rst* Providing Service Straight From the Heart* Encouraging product leadership* Delivering sup
erior financial returns* Providing rewarding career opportunities
SWOT analysis of air

blue

The

SWOT analysis

is the process of analyzing organizationsand their environments based on their strengths, weakn
esses,opportunities and threats. This includes the environmentalanalysis, the process of scanning t
he business environment forthreats and opportunities, which is considered as externalfactors, and th
e organizational analysis, the process of

analyzing a firm’s strengths and weaknesses as internal

factors.SWOT analysis was carried out for AirBlue and the results aresummarized as follows:

Strengths

1.Second largest air-

carrier of Pakistan, enjoying almost 30 percent marketshare on domestic routes.

2.Airblue is a Low-cost carrier (LCC).

The reason behind air blue’s low fares is

that it uses Dynamic Pricing Model. Airblue puts its entire ticket inventory onthe Net and direct internet
booking accounts for 15% of its sales. It beginsselling tickets at a 40% discount to full service ca
rriers (FSCs), but closer tothe date of your travel, you may end up paying up to 30% premium over th
eprice charged by FSCs

.3.98% punctuality of on-time flight departures.

4.Innovative e-ticketing and wireless check-in technologies.

5.Operational efficiency

.6.Airblue is using latest technology for the airline's advantage and its valuedcustomers. Man
y corporate entities tried to create a paperless workenvironment, in order to minimize its costs and maxim
ize its efficiency, butonly Airblue had been successful to the extent that its management does notneed of
fices to function
.7.The airblue aircraft are the latest fly-by-
wire technology Airbus A320's andA321's. This allows the airline more flexibility and scale
s of economy in crewplanning and maintenance capability, adding directly to bottom-
lineprofitability

.8.Lesser workforce because of extensive technology usage.

9.AirBlue is the first among public and private sector airlines in South-
Asia andsecond after Emirates in the region to introduce latest self check-
in system atKarachi airport.

11.Good food, good entertainment, spacious seats, most exciting hospitality,elegant and charming host
esses.

12.Year 2006 witnessed exceptional performance in the short term financingwhich was reduced from
Rs 206 million to Rs 48 million, showing a decreaseof 330 percent

.13.Airblue showed a record operating profit of over Rs 150 million for year 2006while providing a high qu
ality product to the consumers

.14.Airblue outsources most of its secondary tasks to third parties. It helps airlineto cut costs.

Weaknesses

1.

Difficulty in developing brand-awareness as a startup company.2.

Engaged only in passenger service, whereas its competitor PIA is alsoproviding cargo servic
es (SPEEDEX).3.

Not having its own repair and maintenance facilities.4.

Doing less on the advertising and promotion of air line.5.

Not operating flights for Hajj Pilgrims, which could be a major source of income.6.
Small fleet of air crafts.7.

Two aircrafts are acquired on dry lease and one on wet lease.8.

It connects only seven cities in Pakistan.9.

Very tight schedule of flights, which puts extra burden on pilots, cabin crewand hostesses

Opportunities

1.

Year 2007 is being celebrated as “Visit Pakistan Year”. So, the number of

foreign visitors is likely to increase and complimentary tourism industry willincrease deman
d for airline service.2.

Agreement with Airbus Industries for the purchase of eight airbus A320-200and two airbus A330-
200 aircrafts for an estimated cost of $ 790 million. Newaircrafts will be used for additional frequencies
and destinations on domesticand regional routes.3.

Low fares enable market share growth.4.

Introducing new domestic and international routes like Gulf, UK, Jordan, Indiaetc.

5.

Stable economy and growing GDP.6.

The air transport sector of Pakistan would also get a boost from newlydeveloped Port of Gwadar in the Bal
ochistan province. The development of the Gwadar Port, the third deep sea port of the country and the fi
rst of Balochistan, would serve as a link with the Central Asian States. Thegovernment is upgrading the G
wadar International Airport at a cost of 480million rupees. Once upgraded, the airport will be able to hand
le wide-bodyaircraft such as Airbus and Boeing 747 aircraft.7.

Poor performance & red tapism in PIA.8.

Worldwide deregulation makes the skies more accessible, Open Skies.9.

Excellent credit rating allows Air Blue to purchase its expansion strategy.

Threats

1.

Escalating jet fuel prices.2.

Low-

cost Chinese airlines planning to enter into Pakistan’s domestic air

market.3.

Cutthroat price war among airlines.4.

Buses business continuously improving speed in service in mid and longdistant routes, attracting pass
engers away from air service.5.

PIA is also procuring 10 new Boeing planes.6.

Threat of terrorism.7.
 No level-playing field for private airlines, as government always rescues PIAfrom risks.8.

Incapability of national airport runways to handle big crafts.9.

Competition is heating up as four new local airlines are going to start theiroperations very soon..