2. A Relatively Smooth Ride
The US airlines industry generated $ billion in 2014 scheduled passenger air transportation revenues, or a 7.8% increase. Revenue passenger fares accounted for billion of the 2014 total, 5.5% more than 2014’s $
The US airlines industry’s pre-tax profit during the first half of 2015 averaged 13.7%, an 82% increase, compared to 7.5% for the first half of 2014.
The price of oil is the major factor in revenue and profit growth. Aviation jet fuel prices for North American carriers decreased 37.6% from November 2014 to November 2015, and saved US airlines approximately $6.7 billion during the first half of 2015.

3. Airborne Money Machines
During the first half of 2015, Southwest, at 18.5%, and American, at 15.0%, exceeded the average pre-tax profit margin increase of 13.7% while Delta, at 11.5%, and United, at 10.5%, were less than the average.
For the 12 months ending August 2015, total emplaned passengers in the US were 682 million, or 4.0% more than the same period ending August 2014.
During the period noted above, Southwest was first in domestic revenue passenger miles, at billion; followed by Delta, billion; United, billion; American, billion; and US Airways, billion.

4. Regionals’ Mixed Message
The top regional carrier groups by share of total passengers enplaned were SkyWest, 37.15%; American Airlines Group, 15.64%; Republic Holdings, 14.22%; Endeavor Air, 7.63%; and Trans States Holdings, 6.79%.
Total revenue passenger miles increased from billion for 2013 to billion for 2014; average daily departures decreased 9.0% and departures completed declined from 4.38 million during 2013 to 4.20 million during 2014.
While both average passenger trip increased from 474 to 480 miles and average seating capacity from 56 to 58, 2013 and 2014, respectively, total fleet flying hours decreased 3.7% from million to million.

5. Regionals Losing Relevance
Regional airlines are likely to contract further for a number of reasons. For decades, the regionals flew passengers from small markets to major hubs to fill the planes of the major airlines, but with 80–85% load capacity, they don’t need those passengers.
Because the major airlines no longer need this passenger flow, it has become cost-prohibitive for the regionals to fly so many 50-seat jets. In fact, an industry forecast expects 600 of these jets to be retired by 2020, as the future is 70-seat plus planes.
Regional airlines are expected to have difficulty replacing pilots who find jobs with the major airlines because the regionals’ pay scale is so low, there will be fewer planes to fly and regional pilots will find little opportunity for advancement.

6. Rocky Ride Ahead
Although pre-tax profits and passenger capacity have increased, the passenger revenue per available seat mile (PRASM) decreased 3.7% from July 2014 to July 2015 for the major US airlines, primarily because of lower ticket prices.
It has been challenging for airlines to improve the customer experience, compared to most other products and services consumers purchase. Reducing space in economy to upsell more business passengers to first class has caused lower customer satisfaction.
The four major airlines are facing an investigation from the US Department of Justice concerning possible non-competitive practices to keep fares higher and there is pressure from labor to increase wages.

7. Advertising Strategies
Recommend regional airlines use TV advertising to promote the convenience and how much time is saved with regional air travel versus automobile, rail or bus.
Regional airlines may be able to partner with regional attractions and promote a discounted package of airfare and family attraction admissions and/or hotel accommodations.
Suggest television to promote discounted airfares for groups greater than 10, or any appropriate number, for senior activities; family events, such as weddings; church groups; sports fans; and businesses for regional conferences and tradeshows.

8. Social Media Strategies
Regional airlines can ask passengers/customers to submit videos of regional places they visited or regional activities in which they participated, emphasizing how much more time they had because of the short flight, compared to other transportation options.
Use social media for regular polling of passengers, asking both what they liked and didn’t like about their flight and services. They could also submit selfies with a flight attendant who provided superior service.
Social media is the perfect channel to reach Millennials with relevant content and possibly promoting a Fly-with-a-Friend discount. Use Pinterest to target women for an airfare discount when a group of an appropriate size travels to a larger city to shop.