Rivalry Amongst Top-Five Major Airlines in the U.S. Market

Abstract

Understanding the economic characteristics of the U.S. airline industry, assessing the degree of competition/rivalry among the competing airline businesses in the U.S. airline industry, and (3) making recommendations to the airlines and to the consumers of air transportation are the primary objectives of this research study. The authors analyze the rivalry among major U.S. airlines operating in the domestic market using datasets extracted from Bureau of Transportation Statistics for operations during a 12-month period ending in May 2019. Amongst the 17 major U.S. airlines, whose annual operational revenue is over $1 billion, a set of top-five airlines has been identified using the percentage of their marketshare. The research findings indicate that these five major airlines have an intense rivalry in the U.S. domestic market in terms of number of markets served, number of departures made, number of passengers transported, amount of cargo carried, load factor, revenue and cost of operations, profit and loss, and net income earned. Hence, these airlines put pressure on one another and limit each other’s profit potential.