Airline Data Project (ADP)

The U.S. airline industry touches nearly every person’s life. Every day, airlines transport millions of people and goods quickly and easily around the globe. As a result, the health of regional, national and global economies is inextricably linked to this vital industry.

Today, the airline industry is at a crossroads. Nearly three decades since deregulation – and after multiple cycles of financial successes and failures – the industry remains fragile. Since 2002, five of the seven network carriers have filed for bankruptcy protection. Increased competitive pressure from low-cost carriers, the loss of consumer confidence in the system given its unreliable operating performance, and the transparency of pricing facilitated by the Internet and online travel distribution channels have all contributed to a precipitous decline in average fares and a significant impact on airline revenues.

And since 2006, fuel has emerged as the single largest industry expense, surpassing labor costs for the first time. These and other outside influences have all led to the conclusion that the airline business has been irrevocably changed, and new operating models and approaches are necessary.

The U.S. commercial airline industry is one of the most diverse, dynamic and perplexing in the world. It is fast-evolving, labor intensive, capital intensive, hyper-competitive and highly susceptible to the ebb and flow of business cycles as well as being among the most regulated of deregulated businesses. At the same time, this often unpredictable industry is inextricably linked to the health of the U.S. and global economies.

The Airline Data Project (ADP) was established by the MIT Global Airline Industry Program to better understand the opportunities, risks and challenges facing this vital industry. The ADP presents the most important airline industry data in one location in an easy-to-understand, user-friendly format. The data has been selected and analyzed to present a view of the industry and its important trends, as well as to identify fundamental drivers of success – and in some cases, the early signs of potential failure.

The ADP is designed to support the goals of the Sloan Foundation Industry Studies Program and the MIT Airline Industry Consortium. It is a unique and important repository of data and analysis that will allow individuals – from academia to the financial community to the news media – to monitor the evolution of the U.S. commercial airline industry.

Dramatic changes to airline industry revenues have forced management at most U.S. airlines to review many long-standing business approaches. It’s clear that many of these changes accelerated as airline revenues began falling behind their historic relationship with the Gross Domestic Product – a well established and documented trend since late 2000.

The ADP focuses on key revenue metrics to highlight the role of revenue and to provide context when expenses, finances and operating characteristics are analyzed. The data-set includes a simple and transparent stage-length adjustment for each carrier by year.

Visitors must take into account each carrier’s industry revenue position at different points in time when making conclusions about a carrier’s network structure, cost position and other operational decisions. This section includes comprehensive industry statistics; individual airline data includes network information, fares and fare premiums.

he project provides transparent documentation of data sources and analytical methodologies in publishing original and supporting statistical and financial data. In all cases, the ADP discloses the specific data sources, quantitative methods and assumptions used in the analysis. The time series of data provided here (beginning in 1995) better enables the user to make estimates or forecasts. More importantly, a long time series provides the breadth of information necessary to give the analysis proper historical context.

The ADP includes validation processes as an integral part of all phases of data collection and compilation, processing and analysis, and conducts appropriate quality evaluations of the statistical or financial information. For example, for the Form 41 and the SEC data, the major line items in the income statements of each were compared, and it was determined that – with few exceptions – the data is comparable with most known differences easily explained. In addition, we have determined that the Form 41 data in an aggregate form calibrates well to the SEC filings. However, when the data is too finely disaggregated it can lose meaning, as when data is presented by aircraft type. In that scenario, certain allocation of some costs may produce numbers which have an uncertain or unreliable meaning.

The ADP has made extensive efforts to aggregate all aspects of the data, applying the same analysis and calculations to each carrier and metric in order to standardize results and comparisons across airlines. Too often, calculations of this type differ by carrier and by the entity providing the data and analysis, which can create confusion. For instance, in the case of aircraft type, we group aircraft by small narrow body (150 seats and less), large narrow body (151 seats and more) and wide body (two aisle aircraft).

To ensure the utility of information, every effort has been made to include general-purpose statistical and financial information and analysis designed to meet a variety of anticipated user needs. That said, users of this site are encouraged to vet each calculation and form their own conclusions regarding data comparisons.

Users also are encouraged to provide feedback regarding their information needs, as well as their ideas for new statistical and financial information and/or data that could be included in future analysis.