Competition among rivals in the airlines industry is getting more fierce by the day. With a whopping 230+ of scheduled and non scheduled airlines who are registered with IATA alone serve the world, it give us indications and flair on the level of competition among the airlines, couple with low cost carries which not part of the statistics that are mushrooming competing head to head with legacy airlines offlate.
Let us examine few statistics to give us a bit of feel of the industry ;
Scheduled passengers carried
| Rank | Airline | 2009 | 2008 | 2007[1] | 2006[2] | 2005 | |
|---|---|---|---|---|---|---|---|
| 1 |  Delta Air Lines4 | 161,049,000 | 106,070,000 | 72,900,000 | 73,584,000 | 86,007,000 | [3] |
| 2 | Southwest Airlines | 101,339,000 | 101,921,000 | 101,911,000 | 96,277,000 | 88,380,000 | [4] |
| 3 | American Airlines | 85,719,000 | 92,772,000 | 98,162,000 | 99,835,000 | 98,038,000 | [5] |
| 4 | United Airlines1 | 81,421,000 | 86,412,000 | 68,400,000 | 69,265,000 | 66,717,000 | [6] |
| 5 |  Lufthansa2 | 76,543,000 | 70,543,000 | 66,100,000 | 53,400,000 | 51,300,000 | [7] |
| 6 |   Air France-KLM3 | 71,394,000 | 73,844,000 | 74,795,000 | 73,484,000 | 70,015,000 | [8] |
| 7 |  China Southern Airlines | 66,280,000 | 57,961,000 | 56,900,000 | 48,512,000 | 43,228,000 | |
| 8 |  Ryanair | 65,300,000 | 57,647,000 | 49,030,000 | 40,532,000 | [9] | |
| 9 | Continental Airlines | 62,809,000 | 66,692,000 | 53,700,000 | 55,925,000 | 57,547,000 | [10] |
| 10 | US Airways | 51,016,000 | 54,776,000 | [11] | |||
| Northwest Airlines | Merged with Delta Air Lines | 49,671,000 | |||||
 Japan Airlines | 47,952,000 | 46,871,000 | 50,442,000 | 48,911,000 | 50,884,000 | [12] | |
| All Nippon Airways | 44,562,000 | 47,185,000 | 50,384,000 | 49,226,000 | 48,315,000 | [13] |
- Notes
- Based on International Air Transport Association and individual companies' published figures
- ^1 United will become the world's largest carrier when operations with Continental Airlines are complete
- ^2 numbers include Swiss International Air Lines since 2007, Austrian Airlines and bmi since 2009
- ^3 numbers according to fiscal year, which ends in March
- ^4 includes Northwest Airlines since 2009, regional affiliates since 2008
Passenger airlines
Updated as of November 25, 2010
| Rank | Airline | Fleet size | Orders | Notes |
|---|---|---|---|---|
| 1 | Delta Air Lines | 726 | 39 | Dec 16 2010 [18] |
| 2 | Lufthansa+Swiss+Austrian Airlines | 722 | 82 | Dec 31 2009 [19] |
| 3 | United Continental Holdings | 710 | 116 | Dec 16 2010 [20] |
| 4 | American Airlines | 625 | 116 | Dec 16 2010 [21] |
| 5 | Air France-KLM | 564 | 80 | Nov 1 2010 [22] |
| 6 | Southwest Airlines | 550 | 133 | Dec 16 2010 [23] |
| 7 | US Airways | 345 | 133 | Dec 16 2010 [24] |
| 8 | China Southern Airlines | 344 | 245 | Dec 16 2010 [25] |
| 9 | Continental Airlines (merging with United) | - | - | [26] |
| 10 | SkyWest Airlines | 294 | ? | Dec 16 2010 [27] |
| 11 | Air China | 263 | 257 | Dec 16 2010 [28] |
| 12 | China Eastern Airlines | 263 | 83 | Dec 16 2010 [29] |
| 13 | Ryanair | 251 | 57 | Dec 16 2010 [30] |
| 14 |  British Airways | 233 | 42 | Dec 16 2010 [31] |
If you have a closer look at the above statistics, those airlines with the largest carried passengers and largest airlines by fleet are not the one who are doing well financially. We are taught about the concept of economies of scales and leverage, but the latter and the former doesn't work quite well in those airlines .What had happened ? I do not have have the answer as it requires detail studies [ which I do not intend to do here] , but my two cents worth of views are ;
1. Yields are not good i.e. routes are not profitable ;
2. Operational efficiency challenges;
3. Emergence of low cost carriers and middle eastern airlines ;
4. Economy crisis and natural disaster ;
While challenges no. 3 and 4 would have a direct impact on challenges no 1 & 2 , what airlines companies shall do is to minimize and soften the impact of the those external factors, so that it will not bleed much the financial and airlines companies shall coming out with recovery plans.
So, in this example, size does not matter. What matters most are managing what goes into the income statement and statement of financial positions - balance sheet, cash flow and changes in the equity. That is the bottom line.
So, what is the significant of Malaysia Airlines recent signing Memorandum of Understanding [MOU] with KLM [ an airline company which is doing well after its merger with Air France ] ? The news have indeed contributed positively to the company shares trading in the Bursa Malaysia ?
Malaysia Airlines & KLM Signs Memorandum Of Understanding
Dec 22, 2010
Shanghai, 22 December 2010: Malaysia Airlines and KLM are set to investigate closer links with each other, following the signing of a Memorandum of Understanding (MoU) in Shanghai today.
Read more MAS & KLM
I shall share share my thoughts, in Part 3 of MyVu on the topic. Till then, what do you think ?
DISCLAIMER: Notice :Opinions, stories , thoughts expressed are blogger's own and do not necessarily represent the views of the institution or the organizations by which the blogger is employed or any specific person who so ever, either dead or alive.
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