Sources used in this document:

Finally, the consumer is now becoming more leisure oriented. Currently, the middle class in emerging markets is growing exponentially. Countries such as China, India, Brazil and Russia are experiencing robust economic growth. As such, consumers from these countries are willing to travel leisurely to tourist destinations. Due in parts to the worldwide appeal of travel, many airlines are well positioned to take advantage of this impending trend. China in particular, is experiencing a robust increase in consumer discretionary income. More consumers are now willing to purchase products tied more closely to leisure activity as oppose to necessities in life. Globalization in regards to economic activity has created this wealth effect within emerging markets. Emerging markets are now demanding many American products, goods, and services. This demand has increased foreign direct investment in many emerging markets. Many industries from auto makers, to financial institutions are now conducting business in emerging markets. This increase in business activity has created more job opportunities with emerging markets which directly translates into discretionary income. This is a direct result of the growth many of these countries are experiencing. As niche players however, both Southwest and JetBlue have concentrated flight plans and routes. A deviation from this strategy would ultimately require more flights with overseas tourist destinations. Larger players such as United or the now bankrupt American Airlines have a competitive advantage in regards to economies of scale that Southwest and JetBlue do not have.

Rising costs and price competition

Events such as 9/11 have had devastating events on the industry causing losses well into the billions of dollars. The effect of such a cataclysmic event cannot even be quantified, as many still today avoid air travel due to the fear that has been instilled in them. Security, and the cost of security, has increased as a response to the 2001 attacks. The increased expense has been incurred by the airlines themselves, which in turn have no choice but to put the burden on the passengers. The global recession has also caused unquantifiable losses in the industry, especially when coupled with the rise of jet fuel prices and the 2010 climatic events that prevented thousands of airplanes from departing, or landing in their proper destination. Whether an airplane departs or is cancelled does not change the fixed costs of the airline, yet it does directly affect the airline's profits. Also landing in a different airport does require compensation to passengers. Environmental policies that limit CO2 emissions also increase the