General Environmental Analysis The airline industry is very stable and is unlikely to change in the near future. There are many reasons for this. Air travel continues to grow and will continue to do so as long as the economy maintains an upward trend. According to the Air Transportation Association, domestic air traffic in the United States grew 2.3 percent in 1998 and 3.5 percent in the first six months of 1999. The percentage of those flying has increased on average 2 percent each year and the percentage of people who had ever flown before increased from 73% in 1993 to 81% in 1997. (Airport Transport Association, Internet). The top three reasons people fly are business trips (47%), visiting family (38%) and vacations (13%). Most airline revenues come from fares charged to passengers, but they also earn ancillary revenues from carrying mail, shipping cargo, selling in-flight amenities, and serving alcoholic beverages (Airport Transportation Association, Internet). The main target market of airlines The passenger today is the business traveler because business trips represent the majority (47%) of air flights. Although this percentage of business travel is slowly decreasing, the actual number of business travelers is increasing. The business traveler fits the description of the average airline passenger: he is a man, between the ages of 35 and 54, with a household worth $60,000 or more, and lives in the western region of the country (Airport Transportation Association, Internet). Business travelers tend to be very price inelastic in terms of airfares, and as a result, airlines offer them perks like priority check-in, expedited baggage handling, frequent flyer miles, and on-board cell phones to entice them to businessmen. fly with your own carrier. The other segment of the airline market is that of leisure travellers. These passengers tend to be extremely price sensitive, which is exactly the opposite of business travelers. As a result, airlines must find ways to beat competitors on pricing. Since the leisure traveler is not loyal to any airline, price becomes the determining factor in deciding which airline to fly with. Once again, just in front of business travellers, the number of leisure travelers decreased while the number of trips increased. While the industry seems to be going extremely... middle of paper... another airline and using it through a larger airline could be a smart move. A certain amount of capital should be devoted to improving the technology because it is, in a sense, the power of the future. Bibliography Air Transport Association. “Air Travel Survey.” Online. MSN.com. Internet.12 November 2000. Available: www.londecon.co.uk/pubs/comp/crb8.htm.Carey, Susan et.al. “AMR, talks with Northwest get serious as pressure mounts for merger decision.” Wall Street Journal. July 12, 2000. Competition Bulletin 8. Online. MSN.com. Internet. November 9, 2000. Available: www.activemedia-guide.com/airindustry.htm. “Four Leading Airlines Launch Global Alliance,” Transport and Distribution, Cleveland, OH, August 2000. Mooreman, Robert W. “United Turns to Academics for Alliances Show They Help Consumers.” Aviation and Space Technology Week. New York. October 2, 2000.Travel agent. “Predictions for the Future: Airlines.” Online. Yahoo.com. Internet. November 12, 2000. Available: www.finarticles.com/cf_1/mOVOU/2-298/59013812/p2/article.jhtml.US Business Reporter. “Airline Industry Profile.” In.