The U.S. Airline Industry: Answer the four questions at the end of the case.

1. Conduct a competitive forces analysis of the U.S. airline industry. What does this analysis tell you about the causes of low profitability in this industry?

2. Do you think there are any strategic groups in the U.S. airline industry? If so, what might they be? How might the nature of competition vary from group to group?

3. The economic performance of the airline industry seems to be very cyclical. Why do you think this is the case?

4. Given your analysis, what strategies do you think an airline should adopt in order to improve its chances of being persistently profitable?