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Rethinking the aviation industry
The signs presaging a long and painful slump for the airline industry were already clear well before September 11: passenger traffic was trending downward, price wars were accelerating, and new competitors were taking business from the big hub-and-spoke players. The terrorist assault on the United States only exacerbated these problems. What will the airline industry look like when it emerges from the downturn? One thing seems certain: the major carriers that have dominated commercial air travel for two decades will lose share to smaller and more nimble competitors.
The take-away: Can today's major carriers fly their way clear of the airline industry's problems? Only if they make concerted long-term efforts to improve their profitability by changing their fleet structures, their labor agreements, and their basic operating assumptions.
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