strategic-management

34 MERNOUSH BANTON
EXHIBIT 7 Airline On-Time Statistics—Year 2008
Airline On-Time Arrival (Percentage)
Hawaiian 90.0%
Southwest 80.5%
US Airways 80.1%
Frontier 79.0%
Alaska 78.3%
Northwest 76.8%
AirTran 76.7%
Delta 76.4%
Atlantic Southeast 74.2%
Continental 74.0%
JetBlue 72.9%
American Eagle 72.9%
United 71.6%
Comair 69.9%
American 69.8%
Source: Bureau of Transportation Statistics, February 2009.
Competition
Competition is stronger than ever in many medium- to long-haul connecting markets, where
major carriers compete for passengers over their respective hub-and-spoke networks.
The domestic airline industry generally is characterized as having low profit margins, high
fixed costs, and significant price competition. Exhibits 9, 10, 11, and 12 compare some
direct competitors.
EXHIBIT 8 Sample Round-Trip Itinerary: Peoria, IL (PIA)
to Raleigh/Durham, NC (RDU) via Chicago
O’Hare (ORD)
Base Airline Fare $300.00
Federal Ticket (Excise) Tax (7.5%) 22.50
Passenger Facility Charge (PIA) 4.50
Federal Flight Segment Tax (PIA-ORD) 3.60
Federal Security Surcharge (PIA-ORD) 2.50
Passenger Facility Charge (ORD) 4.50
Federal Flight Segment Tax (ORD-RDU) 3.60
Federal Security Surcharge (ORD-RDU) 2.50
Passenger Facility Charge (RDU) 4.50
Federal Flight Segment Tax (RDU-ORD) 3.60
Federal Security Surcharge (RDU-ORD) 2.50
Passenger Facility Charge (ORD) 4.50
Federal Flight Segment Tax (ORD-PIA) 3.60
Federal Security Surcharge (ORD-PIA) 2.50
Total Taxes and Fees $ 64.90
Taxes as % of Fare 21.6%
Taxes as % of Ticket 17.8%
Source: http://www.airlines.org.