Reasons For Airline Struggle With Profitability Essay

1608 Words Sep 16th, 2016 7 Pages
Everyday approximately two million people fly in the United States. This huge industry helps drive $1.5 trillion dollars annually and supplies the United States with more than 11 million jobs (Partnering in Safety & Security). Even with this huge amount of revenue for the industry, many airlines struggle with profitability. There are multiple reasons that airlines struggle with profitability. According to the Harvard Business Review, the biggest reasons that airlines struggle with profitability are that consumers are now familiar with cost cutting strategies, empty seats, and mergers and acquisitions. Mergers and acquisitions are becoming more popular as companies try to buy growth instead of compete with other airlines. This also gives the companies new flight routes. Even with an industry that has struggled there are airlines that have made high profits (Veselinovic).

Some smaller airlines are also succeeding in this market by having high operating margin. The top 5 most profitable airlines are (Smith).

Allegiant Air is an American low-cost airline owned by Allegiant Travel Company. Allegiant Air primarily looks to serve leisure travelers that are going from Northern United States to Southern United States. Allegiant Air started with very few routes but has seen rapid growth recently. The rapid growth of the company has been recognized in Fortune 100’s Fastest Growing Companies: listed at 25. Allegiant Air has 11 operating bases where…

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