Skip to main content

The Competitive Status of the U.S. Civil Aviation Manufacturing Industry A Study of the Influences of Technology in Determining International Industrial Competitive Advantage (1985) / Chapter Skim
Currently Skimming:


Pages 37-41

The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.


From page 37...
... It also produced an inappropriate match between the existing aircraft fleet and the evolving network of routes. For many of the major airlines the consequences of these events, combined with a deep recession, have been a suboptimal fleet mix for hub-and-spoke routes, reductions in market share, serious deterioration in financial performance, dramatically different and heightened competition, and an urgent need to control or reduce frequently intractable operating costs.4 Table 2-4 and Figures 2-3 to 2-5 reflect the decline from consistent profits to severe losses and the deterioration in debt/equity and working capital ratios, and breakeven points.
Read the entire page →
From page 38...
... The sharp deterioration in financial performance has dried up the former, and the reduced stability brought about by deregulation, combined with poor profit prospects, has largely dried up the latter. It is interesting to note that representatives of the equity investment community are more optimistic over the financial prospects of the airlines than are bankers who supply credit and must be concerned with ability to repay loans on scheduie.5 The financial results for 1983 have not been reassuring.
Read the entire page →
From page 39...
... . ~~ A 1 1 1 Lit 1 1 1977 1978 1979 1980 1981 1982 YEAR FIGURE 2-3 Domestic Operating Profit of the Major Airlines Before and After Deregulation SOURCE: Civil Aeronautics Board.
Read the entire page →
From page 40...
... 12.5r 10.0 A, 7.5 LLI corn 5.0 2.5 o 1 1 1 1 1 1 1 1 976 -7.5 1 970 1 972 1 974 Deregulation \ \ ~ Wok 1 978 1 980 1 982 YEAR FIGURE 2-4a Working Capital Ratio, U.S. Major Airlines SOURCE: Presentation before U.S.
Read the entire page →
From page 41...
... The failure of several additional major carriers is a possibility. It is likely that when the situation stabilizes the industry will continue to exhibit the characteristics now displayed, i.e., it will be made up of several financially strong carriers, such as American, Delta, and United, a number of marginal carriers, and a number of new entrants with varying financial strengths.
Read the entire page →

Key Terms

  • major carriers
  • major airlines
  • market share
  • financial performance
  • transport aircraft

  • major hubs
  • aerospace industries
  • aeronautics board
  • foreign competition
  • operating costs

  • industries association
  • civil aeronautics
  • market requirements
  • lower costs
  • market segments

  • airline industry
  • domestic airline
  • strong carriers
  • economic recovery
  • fare competition

  • route structure
  • route structures
  • changes noted
  • operating cost
  • launch customers

  • deep recession
  • profit prospects
  • civil aviation
  • manufacturing industry
  • time scale


    • This material may be derived from roughly machine-read images, and so is provided only to facilitate research.
    More information on Chapter Skim is available.