Industry Life Cycle in the Airline Industry : a Case Study of Delta and Southwest
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Motivated by the events of the Covid-19 pandemic, this paper studies the effect of government bailouts on the airline industry. The proposal that this paper makes is that the airline industry life cycle has been permanently affected leading to inefficiencies. The airline industry has suffered from years of consolidation starting at the end of the last financial crisis. This paper studies the last two decades of the airline industry, with a focus on the last decade. Research for this paper is done as a case study with focus on Delta and Southwest Airlines. Delta and Southwest have shown to be the most profitable airlines in the industry in the last decade and provide great case studies. Michael Porter’s industrial life cycle is used as the overarching theme of the research. Findings of the research indicate that over the last decade as profits have grown for Delta and Southwest productivity has not, indicating a lack of technological advancement. The industry will be faced with great challenges moving forward, and these challenges are highlighted throughout the paper.
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