PwC analyzed average US domestic airfares in 2005 to compare how they have changed in relation to labor costs and fuel costs to measure the impact of these economic indicators against an airline company's financial performance.
The last decade has seen a significant shift in the landscape of the US airline industry. Several smaller players, such as low-cost carriers, have increased their foothold, while the mainline incumbents have been focused on consolidation. And the four airline "mega-mergers" in the past seven years have been publicly criticized as the cause of reports on disgruntled passengers and anecdotal evidence of drastically higher fares caused by decreased competition on certain routes. However, a close analysis of publicly available data indicates that this criticism may not be entirely warranted. Our latest report analyzes the impacts of recent mega-mergers on the US domestic airline industry.