%. Business travel, which accounts for some 40% of enplanements, could lag overall air travel in the future as soaring fares make videoconferencing an attractive alternative.The outlook for vacation and personal travel in 1999 appeared positive. Strong consumer sentiment and a strong dollar are supporting leisure travel, which accounts for about 60% of enplanements.The strength in the consumer sector is reflected in the sentiment readings calculated by the Conference Board, a private research firm. In June 1998, consumer sentiment reached a 29-year high of 138.2. Though the measure subsequently backed off to 126.0 in September, it remains significantly above the 47.3 nadir recorded in early 1992. With consumers in fine spirits, more dollars will be allocated for leisure and travel.The U.S. airline industry took in estimated revenues of $88 billion in 1997, of which $79.5 billion (90%) was derived from passenger fares. Carrying mail and cargo and in-flight sales delivered another $8.5 billion. Domestic travel accounted for 78% of passenger revenues in 1997; international travel accounted for 22%.The largest domestic airline in 1997, based on carrier revenues, was United Airlines, a unit of UAL Corp. With the exception of Southwest, all major airlines today operate through hub-and-spoke networks. In such a network, passengers are flown from surrounding "spoke" cities to a central "hub" airport, where they transfer to the next leg of their flight. Travelers, of course, prefer point-to-point service, and Southwest is able to satisfy that need by primarily operating in short haul routes. The air travel industry is capital-, labor-, and technology-intensive. Airlines are subject to intense competition, which produces falling yields and razor-thin margins. To succeed, airlines must quickly employ any new process or procedure that can reduce costs.Internet and AirlinesThe Internet has the potential to radically alter the way airline seats are...
