Paper Summary:

This report looks at how economic indicators like the Gross Domestic Product, inflation as measured by the Consumer Price Index, unemployment, capacity utilization, personal income and the actions of the Federal Reserve can be used to observe the true nature of the airline industry's economic woes.

From the Paper:

"There is a definite economic crisis coming out of the airline industry. Carriers like American Airlines, Delta, United and Continental continue to operate in the red as issues such as the price of fuel, terrorism and weak world economies continue to hamper the industry's attempts to move into the black. Each of these large United States based carriers have either filed or has considered filing for bankruptcy protection at one time or another in an attempt to rediscover solvency. Of course, many believe that the events surrounding September 11, 2001, where terrorists hijacked several American planes and used them as missiles, is the only reason for the airline industry's current financial predicament. However, throughout the past thirty years, the true dilemma the airline industry has faced can found in economic indicators that show the downturns should be attributed to other economic predictors such as inflation, the United States and world economies, globalization and the very obvious factor of stiff competition. Reduced fairs will never work if the industry faces escalating operating costs."

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