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I. INTRODUCTION, METHODOLOGY & PRODUCT DEFINITIONS

II. EXECUTIVE SUMMARY

1. Market Analysis II-1

• Current and Future Analysis II-1
• Historic Review II-1

2. Airlines Industry: A Global Perspective II-2

• Industry Snapshots II-2
• Global Airlines in 2003 II-2
• Service Overview II-3

3. Passenger Transport II-4

• First Class II-4
• Business/Executive Class II-4
• Economy/Tourist Class II-4
• Table 1: Leading Airlines Worldwide by Passenger Traffic in 2003 - Air France, American, British Airway Continental, Delta, Lufthansa, Northwest, Singapore, Southwest, and United (In RPK Billion) (includes corresponding Graph/Chart) II-4
• Table 2: Leading Airlines Worldwide by Passenger Traffic in First Nine Months of 2002: Air France, American, British Airways, Continental, Delta, Lufthansa, Northwest, Singapore, Southwest, and United (In RPK Billion) (includes corresponding Graph/Chart) II-5
• Table 3: Leading Non-US Airlines Worldwide by Passenger Traffic in 2002: Air Canada, Air France, Alitalia, British Airways, Cathay Pacific, Emirates, Iberia, JAL, KLM, Korean, Lufthansa, Qantas, SAS, Singapore, and Thai Int'l (In Billion RPK) (includes corresponding Graph/Chart) II-5
• Table 4: Leading Non-US Airlines Worldwide by Number of Passengers Carried in 2002: Lufthansa, British Airways, Iberia, SAS, Qantas, JAL, Korean, China Southern, Singapore, Thai Int'l, Saudi Arabian, Cathay Pacific, China astern, Air China, and Turkish (In Million) (includes corresponding Graph/Chart) II-6
• Table 5: Leading Airlines Worldwide by Passenger Train 2001: Air Canada, Air France, Alitalia, All Nippon, America West, American, British Airways, Cathay Pacific Continental, Delta, Iberia, JAL, KLM, Korean, Lufthansa Malaysia, Northwest, Qantas, Singapore, Southwest, Swissair, Thai International, TWA, United, and US Airways (In Billion RPK) (includes corresponding Graph/Chart) II-7
• Table 6: Leading Airlines Worldwide by Number of Passengers Carried in 2001: Air Canada, Air France, Alitalia, All Nippon Group, America West, American, British Airways, China Southern, Continental, Delta, Iberia, Japan Airlines, Japan Air System, KLM, Korea Lufthansa, Malaysia, Northwest, Qantas, SAS, Southwest Thai International, TWA, United, and US Airways (In Million) (includes corresponding Graph/Chart) II-8
• Table 7: Passengers Handled by Leading 200 Worldwide Carriers in 2001: Breakdown by Region for North America, Europe, Asia-Pacific, Middle East & Africa and Latin America (In Million) (includes corresponding Graph/Chart) II-9
• Table 8: Passenger Traffic Handled by Leading 200 Worldwide Carriers in 2001: Breakdown by Region for North America, Japan, Europe, Asia-Pacific, Middle East and Africa, and Latin America (In Billion RPK) (includes corresponding Graph/Chart) II-9
• Table 9: Passengers Handled by Worldwide Carriers in 2000: Breakdown by Region for North America, Europe, Asia-Pacific, Middle East and Africa, and Latin America (In Million) (includes corresponding Graph/Chart) II-9
• Table 10: Passenger Traffic Handled by Worldwide Carriers in 2000: Breakdown by Region for North America, Japan, Europe, Asia-Pacific, Middle East and Africa, and Latin America (In Billion RPK) (includes corresponding Graph/Chart) II-10
• Table 11: Leading Airlines Worldwide by Number of Passengers Carried in 2001: Air Canada, Air France, Alitalia, All Nippon Airways, American Airlines, British Airways, Continental Airlines, Delta Air Lines, Japan Airlines, Lufthansa, Northwest Airlines, Southwest Airlines, TWA Airlines, United Airlines, and US Airways (In Million) (includes corresponding Graph/Chart) II-10
• Table 12: Leading Airlines Worldwide by Revenue in 2001: Air Canada, Air France Group, Air New Zealand Group, Airborne Express, Alitalia Group, All Nippon, AMR Co, British Airways, Cathay Pacific, Continental, Delta, FedEx, Iberia, AL Group, Japan Air System, KLM, Korean, Lufthansa Group, Northwest, Qantas, SAS Group, Singapore Group, Southwest, UAL Corp., and US Airways (In US$ Billion) (includes corresponding Graph/Chart) II-11
• Table 13: Leading International Airlines by Passenger Carried in 2000: British Airways, Lufthansa, Air France, American Airlines, KLM, Singapore Airlines, Japan Airlines, Swissair, SAS, and Cathay Pacific (In Million) (includes corresponding Graph/Chart) II-12
• Table 14: Leading International Airlines by Passenger Traffic in 2000 British Airways, Lufthansa, Air France United Airlines, Japan Airlines, Singapore Airlines, American Airlines, KLM, Northwest Airlines, and Qantas (In Million RPK) (includes corresponding Graph/Chart) II-12
• Table 15: Leading Charter Airlines Worldwide by Number of Passengers Carried in 2000 Air 2000, Air Berlin, Air Transat, Airtours, Britannia, Condor, Hapag-Lloyd, JMC Airlines, LTU, and Monarch (In Million) (includes corresponding Graph/Chart) II-13
• Table 16: Leading Regional Airlines Worldwide by Revenue in 2000: Air Canada Regional, American Eagle, Atlanta Coast, Atlantic Southeast, Crossair, Lufthansa CityLine, Mesa Air Group, Rio-Sul Regionais, SkyWest Airlines, US Airways Express (In US$ Million) (includes corresponding Graph/Chart) II-13
• Table 17: Leading Regional Airlines Worldwide by Revenue Passenger Kilometers in Billion (2004): American Airlines, United Airlines, Delta, Air France/KLM, Northwest, Continental, British Airways, Lufthansa Group, Southwest and Qantas Group (includes corresponding Graph/Chart) II-14

4. Cargo Transport II-15

• Table 18: Leading Non-US Airlines Worldwide by Freight Traffic in 2002: Singapore, Lufthansa Cargo, Korean, Cathay Pacific, China Airlines, British Airways, KLM, Cargolux, EVA, Japan Airlines, Nippon Cargo, Emirates, Air China, LanChile, and Thai Int'l (In Billion FTK) (includes corresponding Graph/Chart) II-15
• Table 19: Leading Airlines Worldwide by Freight Traffic in 2001: Air France, Air Hong Kong, American, Asiana, British Airways, Cargolux, Cathay Pacific, China Airline, Delta, EVA, FedEx, JAL, KLM, Korean, Lufthansa Cargo Malaysia, Martinair, Nippon Cargo, Northwest, Qantas, Singapore, Swissair, Thai International, United Airlines, and UPS (In Billion FTK) (includes corresponding Graph/Chart) II-16
• Table 20: Leading International Airlines by Freight Traffic in 2000: Lufthansa, Korean Air Lines, Singapore Airlines Air France, British Airways, Federal Express, Japan Airlines, Cathay Pacific, KLM, and Cargolux (In Million FTK) (includes corresponding Graph/Chart) II-17
• Table 21: Leading Airlines Worldwide by Freight Traffic in 2000: Air France, British Airways, FedEx Express, Japan Airlines, KLM, Korean Air, Lufthansa Cargo, Singapore Airlines, United Airlines, and UPS (In Billion FTK) (includes corresponding Graph/Chart) II-17

5. Fleet Dynamics and Distribution II-18

• Fleet Composition II-18
• Fleet Management II-18
• Table 22: Global Aircrafts Makeup: By Size and Type in 2003 (includes corresponding Graph/Chart) II-18
• Table 23: Leading Airlines Worldwide by Fleet Size in 2001: Air Canada, Air France, Alitalia, All Nippon, America West, American, American Eagle, Atlantic Southeast, British Airways, Continental, Continental Express, Delta, FedEx, Iberia, Japan Airlines, Korean, Lufthansa, Northwest, SAS, Saudi Arabian, SkyWest, Southwest, United, UPS, and US Airways (In Units) (includes corresponding Graph/Chart) II-19
• Table 24: Leading Cargo Airlines Worldwide by Fleet in 2001: Air Transport International, Airborne Express, Atlas Air, Cargolux, Channel Express, DHL Airways, Emery Worldwide Airlines, European Air Transport, Evergreen International Airlines, Express One International, FedEx 30, Kelowna Flightcraft, Kitty Hawk, Air Cargo, Kitty Hawk International, Korean Air, Lufthansa Cargo Airlines, Polar Air Cargo, Ryan International, TransAfrik, and UPS (In Units) (includes corresponding Graph/Chart) II-20

6. Global Alliances II-21

• Benefits of an Alliance II-21
• Expanding Geographic Coverage II-21
• Low-Cost Market Development II-21
• Maintaining Presence II-21
• Star Alliance: A Major Force II-21
• Table 25: Member Airlines of Star Alliance and their Destinations: Air Canada, Air New Zealand/Ansett, All Nippon Airways, Austrian Airlines, Bmi British Midlan, Lufthansa, Mexicana, SAS, Singapore Airlines, Thai Airways International, United Airlines, and Varig (includes corresponding Graph/Chart) II-22
• OneworldЃE Shrinking the World II-23
• Table 26: Member Airlines of Oneworld Alliance and their Destinations: AerLingus, American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, LanChile, and Qantas (includes corresponding Graph/Chart) II-23
• SkyTeam II-23
• Table 27: Member Airlines of SkyTeam Alliance and their Destinations: Aeromexico, Air France, Alitalia, CSA Czech Airlines, Delta, and Korean Air Wings (includes corresponding Graph/Chart) II-24
• Table 28: Member Airlines of Wings and their Destinations Northwest Airlines, Japan Air Systems, Malaysian Airlines, KLM, KLM Excel, Martinair, Kenya Airways, and Surinam Airways (includes corresponding Graph/Chart) II-24
• Table 29: Leading Alliances: Percentage Breakdown by Seats Offered for 2001 for Star Alliance, Oneworld, SkyTeam, Wings, and Unaligned Carriers (includes corresponding Graph/Chart) II-25
• Table 30: Leading Alliances: Percentage Breakdown by Scheduled RPKs in 2001 for Star Alliance, Oneworld, SkyTeam, Wings, and Unaligned Carriers (includes corresponding Graph/Chart) II-25
• Table 31: Leading Alliances: Percentage Breakdown by Seats Offered in 2000 for Star Alliance, Oneworld, SkyTeam, Wings, and Unaligned Carriers (includes corresponding Graph/Chart) II-25
• Table 32: Leading Alliances: Breakdown by Number of Passengers Carried for 2001 for Star Alliance, Oneworld, SkyTeam, Wings, and Unaligned Carriers (In Million) (includes corresponding Graph/Chart) II-26
• Table 33: Leading Alliances: Percentage Breakdown by Number of Passengers Carried for 2001 for Star Alliance, Oneworld, SkyTeam, Wings, and Unaligned Carriers (includes corresponding Graph/Chart) II-26Traffic Flow Between Regions II-26US and Europe II-26
• Table 34: Leading Alliances: Market Share Breakdown by Scheduled Seats for 2000-2001 Between US and Europe for Star Alliance, Oneworld, SkyTeam, Wings, and Unaligned Carriers (includes corresponding Graph/Chart) II-27US and Asia-Pacific II-27
• Table 35: Leading Alliances: Market Share Breakdown by Scheduled Seats for 2000-2001 Between US and Asia-Pacific for Star Alliance, Oneworld, SkyTeam, Wings, and Unaligned Carriers (includes corresponding Graph/Chart) II-27Europe, Asia-Pacific and Japan II-28
• Table 36: Leading Alliances: Market Share Breakdown by Scheduled Seats for 2000-2001 Between Europe, Asia-Pacific and Japan for Star Alliance, Oneworld, SkyTeam, Wings, and Unaligned Carriers (includes corresponding Graph/Chart) II-28

7. Trends & Issues II-29

• Internet Remains a Key Distribution Channel II-29
• Fuel Price Hike II-29
• Good Time to Launch an Airline? II-29
• Slots II-29
• Aircrafts II-29
• Lease Rates II-29
• Weak Players II-30
• Workforce II-30
• Price Advantage II-30
• Passenger Traffic II-30
• Finances II-30
• Advertising II-30
• Loyalty Problems II-30
• Global Airfreight Increasing Gradually II-30
• International Air Traffic Increasing II-31
• Global Traffic Rebounces in 2004 II-31
• Airline Business Continues to Grow II-31
• Table 37: Leading Airlines Worldwide in 2003: Percentage Breakdown by Scheduled Freight Ton Kms Flown for FedEx, Lufthansa, KAL, UPS, SIA, Cathay, Air France, and Others (includes corresponding Graph/Chart) II-32
• Airlines Target the Corporate Midmarket II-32
• Discount Carriers Take Undue Advantage II-32

8. Recent Industry Activity II-33

• Lufthansa and Swiss Merge II-33
• Independence Air Turns Bankrupt II-33
• Caribbean Star to Expand Capacity II-33
• ATA Airlines to Suspend Flights from Denver II-33
• United Airlines and Swiss Sign Code-share Agreement II-33
• Emu Airways and Airlines of South Australia Terminate Operations II-33
• Russian EKNOR Airlines Bankrupt II-34
• OzJet to Launch Operations II-34
• China Eastern Airlines to Acquire 80 Aircraft II-34
• Delta to Merge Song into Mainline Operations II-34
• Japan Airlines to Join oneworld Alliance II-34
• Northwest Applies to End Aircraft Leases II-34
• American Airlines Reduces Frequencies II-34
• Iberia Withdraws from Mexico and Aero Mexicana Privatization II-34
• Delta to Restructure Comair Operations II-35
• Singapore Airlines to Promote Australia II-35
• America West Merges with US Airways II-35
• GoJet Airlines to Begin Operations II-35
• Mesa to Establish New Airline in Hawaii II-35
• Northwest to Terminate Jet Leases to Regional Airlines II-35
• Delta Announces Restructuring Initiatives II-35
• Lithuanian Airlines Spins Off Non-core Divisions II-36
• China Airlines to Acquire Stake in Yangzijiang Express Airlines II-36
• Indian Airlines to Acquire 43 Aircraft from Airbus II-36
• Taiwanese Airlines to Enter Chinese Airspace II-36
• United Signs Aircraft Maintenance Agreement with Ameco II-36
• SkyWest to Acquire Atlantic Southeast Airlines II-36
• Ethiopian Airlines to Acquire 787 Dreamliners II-37
• Turkish Airlines to Acquire 8 Boeing Aircraft II-37
• All Nippon Airways to Divest Nippon Cargo Airlines Stake II-37
• Middle East's First Private Airline Launched II-37
• LAN Airlines to Expand Fleet II-37
• Lion Mentari Airlines to Acquire 60 Aircraft II-37
• SIA Cargo in Joint Venture in China II-37
• Saudi Arabian Airlines to Privatize Business Divisions II-38
• China Eastern Airlines to Acquire CYA and CAN II-38
• Temasek Holdings to Acquire Stake in Pacific Airlines II-38
• Kingfisher Airlines Launched II-38
• Skymark Airlines Merges with Zero Inc II-38
• Japan Airline Purchases Flight Simulator II-38
• China Southern Airlines Co Plans to Purchase Five "Superjumbos" II-38
• Qantas Invests in QantasLink Fleet II-39
• Polish and German Airlines Enter into A Partnership II-39
• South West Airlines and ATA Airlines Ink a Codeshare Agreement II-39
• America West Airlines inks a Codeshare Agreement with Qantas Airways II-39
• South West and ATA Airlines Launch Code Share Flights to Chicago II-39
• Japan Airlines Signs a Pact with Korean Air II-39
• Iberia Signs Maintenance Contract in Nigeria II-40
• Air Canada Extends Code share Service to Vietnam II-40
• France Sells Airbus to China II-40
• Lufthansa Signs an Agreement with TAP Air Portugal II-40
• India Divests Stake in Air India II-41
• Japan Airlines Divests it's Building II-41
• Aeroflot Acquires Arkhangelsk Airlines II-41
• Lufthansa Acquires Seven Airbus A340-600 jets II-41
• Cathay Pacific to increase its fleet to 100 II-41
• Air Hong Kong Purchases two Airbus freighters II-41
• SITA INC Joins Hands with Cargolux Airlines International SA II-41
• America west Acquires A320 Aircrafts II-42
• Air New Zealand Acquires 17 Dash 8 Q300 Turbo-prop Aircraft II-42
• Air New Zealand Expands its Stake in Christchurch Engine Center II-42
• Air France Merges with KLM Royal Dutch Airlines II-42
• Lufthansa Cargo Enters into a Joint Venture with Shenzhen Airlines II-43
• Qantas Airways and CTI Holding form a Joint Venture II-43
• Air China and Lufthansa Extend Their Joint Venture II-43
• JAL, ANA, and Meitetsu Establishes a Joint Venture Company II-43
• Air Canada forms a Joint Venture with bmi II-43
• Cathay Pacific Cargo and Lufthansa Cargo form a Joint Venture II-43
• Telekom Partners with Malaysia Airlines II-44
• Lufthansa Partners with Air India II-44
• Korean Air Ties up with IBM and Hanjin II-44
• SkyTeam Alliance II-44
• South African Airlines inks an Agreement with Virgin Atlantic Airlines II-44
• Korean air Inks an Agreement with Boeing II-44
• Iberia Inks Agreement with China Southern Airlines II-44
• Qantas Inks a Codeshare Agreement with Air France II-45
• Skyteam Enters into an Agreement with China Southern Airlines II-45
• Lufthansa Inks a codeshare Agreement with Singapore Airlines II-45
• Air Canada Joins Hands with Air Jamaica II-45
• Lufthansa Launches New Service to West Africa II-45
• Korean Air Inks an Agreement with LAN Airlines II-45
• Iberia Signs a Five-Year Contract with Luxor Air II-46
• Iberia Signs a Code-Share Deal with Avianca II-46
• British Airways and Swiss International Air Lines Enter a Code Sharing Agreement II-46
• Air France Expands Code-Share Deal with Air Europa II-46
• Air France Signs Agreement with SNAV II-46
• Air Canada Purchases Aircrafts from Embraer II-47
• Air Canada Purchases Aircrafts from Bombardier II-47
• Alitalia Purchases Embraer 170 from Brazil II-47
• Air Canada Purchases 15 EMBRAER 175 aircraft II-47
• Lufthansa Expands Capacity II-47
• Qantas increases its A330 Fleet for domestic service II-47
• Delta Air Lines Inks an MOU with Air Tahiti Nui II-47
• Air Canada Restructures Operations II-47
• France Divests A Part Of Its Stake in Air France-KLM
• Equity II-47
• Lufthansa Builds New Terminal II-48
• Japan Airlines Unleashes Domestic Business Class II-48
• United Express Upgrades Mileage Plus Visa
• Card Program II-48
• Air Canada Launches Advertising Campaign II-48
• Japan Airlines Replaces Aircrafts II-48

9. Industry Activity in the Recent Past II-49

• Air France Plans to Merge with KLM II-49
• Tango Bids Adieu II-49
• Japan Airlines Merges with Japan Air System II-49
• EasyJet Acquires GO-Fly Limited II-49
• Scandinavian Airlines System Plans to Acquire Braathens Airlines II-49
• China Southern Airlines Acquires 49% Stake in China Postal Airlines II-50
• China Southern Airlines, Shandong Airlines and Shanghai Airlines Plan to Acquire Stakes in Sichuan Airlines II-50
• China Airlines Plans to Acquire 25% Stake in China Cargo II-50
• Qantas Airways Acquires Remaining Stake in Impulse Airlines II-50
• Cathay Pacific Enters into Joint Venture with DHL II-50
• Japan Airlines Plans to Form a Joint Venture with All Nippon Airlines and Meitetsu II-50
• American Airlines Enters into Partnership with AT&T II-50
• Lufthansa Enters into Partnership with Vodafone D2 II-51
• Qantas Enters into Alliance with Air New Zealand II-51
• Japan Airlines Cargo Expands WOW Alliance II-51
• Emirates Airlines Enters into Frequent Flyer Partnership with Singapore Airlines II-51
• All Nippon Airlines Enters into Alliance with Air Do II-51
• Lufthansa Cargo Enters into Partnership with LANChile Cargo II-51
• Northwest Enters into Agreement with Delta Air Lines II-52
• SN Brussels Airlines Enters into Code-Sharing Agreement with British Airways II-52
• Japan Airlines and Japan Air System Enters into Code-Sharing Agreement II-52
• US Airways Expands Code-Share Network with United Airlines II-52
• Korean Air Reinstates Code-Sharing Agreement with Air France and Delta Air Lines II-52
• Alitalia Enters into Cross-Equity Agreement With Air France II-53
• Virgin Blue Enters into Code-Sharing Agreement with United Airlines II-53
• Air France and Aeroflot-Russian Airlines Enter into Code-Sharing Agreement II-53
• All Nippon Airlines Enters into Code-Sharing Agreement with United Airlines II-53
• Japan Airlines Expands Code-Sharing Agreement with Air New Zealand II-53
• Air France Expands Code-Sharing Agreement with Delta Air Lines II-53
• US Airways Enters into Agreement with Mesa Air Group II-53
• China Airlines Plans to Enter into Code-Sharing Agreement with Delta Airlines II-53
• Air Canada and Thai Airways International Expands Network II-54
• Cathay Pacific Airways and British Airways Extend Code-Sharing Agreement II-54
• British Airways Expands Code Sharing Agreement with Iberia II-54
• Japan Airlines Enters into Code-Sharing Agreement with Emirates II-54
• United Airlines Expands Cooperation with Lufthansa II-54
• All Nippon Airlines Enters into Code-Sharing Agreements
• with China Southwest Airlines and Shanghai Airlines II-54
• Air Canada and Varig Expands Network II-54
• United Airlines Enters into Parts Deal with Heico Aerospace II-55
• Air Canada Expands Network in Europe II-55
• American Airlines Expands Code-Sharing Agreement with SWISS II-55
• Canada 3000 Airlines Enters into Agreement with Indian Airlines II-55
• Japan Airlines Expands Code-Sharing Agreement with American Airlines II-55
• United Airlines Enters into Code-Sharing Agreement with Virgin Blue II-55
• Japan Airlines Extends Code-Sharing Agreement with Thai Airways II-55
• Air France Cargo Expands Equation Service in the US II-56
• Shanghai Airlines Enters into MoU with Lufthansa II-56
• Thomas Cook Plans to Establish Thomas Cook Airlines II-56
• Qantas Airways Plans to Launch Australian Airlines II-56
• Japan Airlines and Japan Air System Plan to Reorganize Operations at 9 Airports II-56
• Alitalia Plans Reorganization II-57
• American Eagle Airlines Plans to Sell Off Executive Airlines II-57
• Vanguard Airlines Suspends Operations II-57
• Midway Airlines Ceases Operations II-57
• China Aviation Development Foundation Plans to Divest 30% Stake in China Airlines II-57
• United Airlines Files Chapter 11 II-57
• Japan Airlines Installs Self Check-In Kiosks for International Passengers II-57
• American Airlines Acquires Trans World Airlines II-58
• Air Canada Plans to Merge AirBC, AirNova and Air Ontario Operations II-58
• Aloha Airlines Plans to Merge with Hawaiian Airlines II-58
• Air Canada Plans to Acquire 30% Stake in Skyservice Airlines II-58
• British Regional Airlines Group to Merge with Brymon Airways II-58
• Grupo Marsans Acquires Aerolineas Argentinas II-58
• Virgin Blue Plans to Acquire 25% Stake in Air New Zealand from Singapore Airlines II-58
• Singapore Airlines Plans to Increase Stake in Air New Zealand II-58
• Singapore Airlines Acquires 49% Stake in Virgin Atlantic II-58
• Air China Plans to Acquire China SouthWest Airlines II-59
• Singapore Airlines Plans to Acquire Majority Stake in Ansett II-59
• American Airlines, United Airlines, G-Log and Unisys Form Joint Venture with Roadway Corp II-59
• United Airlines Enters into Partnership with SimAuthor, Inc II-59
• United Airlines Plans to Enter into a Marketing Alliance with US Airways II-59
• United Airlines Enters into Marketing Alliance with Visa and Bank One II-59
• Continental Airlines Enters into Partnership with J.P. Morgan Chase & Co II-59
• Japan Airlines Enters into 10-year IT Services Alliance with IBM's Japanese Unit II-59
• Lufthansa Enters into Partnership with Lastminute.com II-59
• Lufthansa German Airlines and Air China Airlines Plan to Enter into a Joint Operating Partnership II-60
• Alitalia and Saudi Arabian Airlines Partners with AirTV II-60
• British Airways Partners with Air Partner II-60
• KLM Royal Dutch Airlines Announce Plans to Form an Alliance with Malaysia Airlines II-60
• Continental Airlines Enters into Agreement with SavvisCommunications Corp II-60
• Mexicana Airlines Enters into Code Sharing Agreement with United Airlines II-60
• Malaysia Airlines Enters into Agreement with Garuda Indonesia for Cargo Services II-60
• United Airlines Enters into Frequent Flier Agreement with Microsoft II-61
• Emirates Airlines and CAE, Inc., in Agreement for Launching Gulfstream Business Jet Training Services at Emirates Aviation Training Center II-61
• Aeroflot-Russian Airlines Enters into Agreement with CardReady International II-61
• Thai Airways Enters into a Code Sharing Agreement with Vietnam Airlines II-61
• Aeroflot-Russian Airlines Enters into Agreement with SkyNet II-61
• American Airlines Enters into Agreement with United Airlines II-61
• Singapore Airlines Enters into Code-Sharing Agreement with Virgin Atlantic II-61
• Saudi Arabian Airlines Enters into Agreement with Datalex II-62
• Air India Enters into Code-Sharing Agreement with Malaysian Airlines II-62
• Aeroflot-Russian Airlines Enters into Agreement with Sabre II-62
• Qantas Airways Plans to Increase Domestic Capacity by 50% II-62
• Southwest Airlines Plans to Expand Capacity by 11% II-62
• Aeroflot-Russian Airlines Signs MoU with Ilyushin Finance for Leasing 25 An-74s II-62
• Virgin Atlantic Plans to Launch Jetset Airlines II-62
• Delta Airlines, Korean Air and Air France Form US Cargo Sales II-62
• Air New Zealand Plans to Launch Freedom Air II-62
• Delta Air Lines Divests Stake in SkyWest Airlines II-63
• Uganda Airlines Shuts Down Operations II-63
• Vasp Plans to Divest Stake in Ecuatoriana de Aviacion and Lloyd Aereo Boliviano II-63
• US Airways to Dismantle MetroJet Low-Fare Unit II-63
• Gill Airways Ceases Operations II-63
• Singapore Airlines Divests Stake in Equant NV II-63
• Singapore Airlines to Divest 20% Stake in Evergreen Air Cargo Services II-63
• Boeing Establishes Security and Safety Services Unit II-63

10. Service Introductions II-64

• Turkish Airlines to Operate Two New Flights from New Delhi to Istanbul II-64
• Lufthansa Launches Private Jet by Lufthansa II-64
• Etihad Introduces Abu Dhabi Toronto Route II-64
• Continental Introduces US-India Nonstop Flight II-64
• Jetstar Asia Introduces Singapore-Yangon Flight II-64
• American Airlines Introduces Dallas/Fort Worth-Osaka Flight II-64
• Singapore Airlines Introduces Direct Flights to Hyderabad II-64
• Indian Airlines Launches Delhi-Singapore Service II-65
• Alaska Airlines' Seattle-Miami Nonstop Flight II-65
• Czech Airlines to Increase Eastern Europe Frequency II-65
• Southwest to Renew Operations from Denver II-65
• Continental to Fly New York-Cologne Nonstop II-65
• Southwest Airlines to Introduce 49 Services II-65
• China Airlines to Introduce 3 Flights to Phnom Penh II-65
• Indian Airlines Announces New Services II-65
• Continental Introduces Houston-Buenos Aires Service II-65
• Okay Airways Launches New Service II-66
• Qatar Airways' Doha-Nairobi Service II-66
• China United Airlines to Launch Services from Beijing II-66
• Delta Announces Salt Lake City-Milwaukee Nonstop Services II-66
• Delta to Add New International Services II-66
• Air Tran to Expand Services from Chicago II-66
• JetBlue to Introduce New York-Austin Service II-66
• BMI to Introduce London-Jeddah Service II-66
• Kingfisher Airlines Introduces New Services II-67
• China Southern Airlines Increases Frequency to Vietnam II-67
• Delta Introduces New Services from Orlando II-67
• New York to Barcelona Nonstop on Continental II-67
• Sky Airlines to Augment Peruvian Services II-67
• Austrian Airlines to Launch New Services to India II-67
• Indian Airlines to Launch Services to Saudi Arabia II-67
• Spirit to Launch Flights to Atlanta II-68
• Kingfisher Airlines Launches Delhi-Mumbai Services II-68
• LAN Airlines to Expand Fleet II-68
• Sri Lankan Airlines to Expand Network II-68
• Vietnam Airlines to Introduce Vietnam-US Service II-68
• Mexicana to Introduce Mexico-Washington Nonstop Service II-68
• Spirit to Introduce Atlantic City-Jamaica Service II-68
• Delta Introduces Chennai-New York Service II-68
• Alaska Airlines to Fly Los Angeles-Mexico City II-68
• South West Airlines Starts Flights to Pittsburgh II-69
• United Airlines Extends its Low Fare Service II-69
• United Airlines Expands Non-Stop Flight Services to China II-69
• North West Airlines Resumes Services to Charlottesville II-69
• North West Airlines Introduces Seasonal Services II-69
• Iberia Introduces New Flights to Moscow and Beirut II-69
• America West Airlines Introduces New Services from Las Vegas II-69
• America West Airlines Rolls Out New Service to Oklahoma City II-70
• Air France Launches Airbus A380 II-70
• Air Canada Introduces New Flights from Beijing to Toronto II-70
• Air Canada Launches New Service Between Toronto and Seoul II-70
• American Airlines Releases New Fares for Military Personnels II-70
• Cathay Pacific Airways Launches New Services to Xiamen II-70
• Cathay Pacific Unveils Daily Shanghai Freighter Services II-71
• Continental Airlines Introduces Non-Stop Service to Guayaquil II-71
• Continental Airlines Launches New Service at Montgomery Regional Airport II-71
• Continental Airlines Introduces Daily Nonstop Service to Mexico II-71
• Continental Airlines Spreads Out Services to Bahamas II-71
• Delta Airlines Introduces New Services Between Birmingham and Washington DC II-72
• Delta Airlines Initiates New Services Between Mississippi and Atlanta II-72
• United Express Launches New Services to California II-72
• KLM Royal Dutch Airlines Offers e-tickets II-72
• Kharkov plant Releases An-148 Aircraft II-72
• LAN Plans to Expand to Oceania through 2006 II-72
• United Airlines Offers Nonstop Services Between Chicago and Shanghai II-72
• United Airlines Offers Nonstop Services to Japan II-73
• United Airlines and All Nippon Airways Jointly Offer E-ticketing II-73
• United Airlines Introduces First Flight to Vietnam II-73
• United and Ted Offer Expanded Service II-73
• United Express Initiates Nonstop Service II-73
• South West Airlines Offers Nonstop Flights II-73
• South West Airlines Introduces Nonstop Flights to Colombus II-73
• South West Airlines Initiated Nonstop Flights from Chicago to Poland II-73
• South West Airlines Increases Flights from Chicago II-73
• Qantas Introduces E-ticketing II-74
• Qantas adds Two New Destinations II-74
• Qantas Releases New Flights to Shanghai II-74
• Qantas Initiates New Jet Service to New Zealand II-74
• North West Airlines Expands Cargo Service to China II-74
• North West Increases Flights from Indianapolis II-74
• Northwest Initiates New Service from China to Tokyo II-74
• Northwest Increases Flights from Indianapolis II-74
• North west airlines introduces nonstop flights from Memphis II-74
• North west airlines introduces nonstop flights from Detroit II-75
• Northwest Expands Flights to Pittsburgh and Toronto II-75
• Korean air and Delta Expand Their Codeshare Service II-75
• Korean airlines Offers Connecting Flight from US to Shanghai II-75
• Iberia Connects Spain to Nigeria II-75
• Iberia offers Direct Flight to Montevideo II-75
• Iberia Receives its New Airbus II-75
• Iberia Offers Nonstop Flight Between Madrid and Moscow II-75
• Delta Airlines Connect New York to Melbourne II-75
• Delta Connection Releases Nonstop service between Charleston, S.C., Orlando and Tampa II-75
• Delta Airlines Introduces Nonstop service between St. Croix and Atlanta II-76
• Delta airlines Releases New Flights Between Atlanta and Beijing II-76
• Delta Connection Introduce First Jet Service II-76
• American Airlines Initiates nonstop Flights II-76
• American Airlines to Start Flights Between Chicago and Shanghai II-76
• Delta Airlines Initiates Jet Services to Tupelo II-76
• Delta Airlines Introduces Flight Service to Birmingham II-76
• United Airlines and TED Expands New Services to Mexico & Caribbean II-76
• South West Airlines Plans Launch Services to Pittsburgh II-77
• South West Adds Flights to Chicago and Phoenix II-77
• Qantas Increases Flight Services to UK II-77
• Qantas Launches Nonstop Services to Shanghai II-77
• North West Airlines Launches Services Between Minneapolis and El Paso II-77
• North West Airlines Unveils Services to Wilkes-Barre/Scranton II-77
• Northwest Airlines Rolls Out New Seasonal Services to Cancun II-78
• North West Airlines Introduces Seasonal Non-stop Jet Service to Memphis II-78
• North West Airlines Unveils Jet Services to Washington DC II-78
• Korean air increases Routes to Russia II-78
• Korean Air Cargo Introduces Flights From Calgary To Seoul II-78
• JAL and China Eastern Airlines Unveils Services to Japan-Shanghai Routes II-78
• JAL and Hainan Airlines Launches Services to Kansai-Haikou Routes II-79
• JAL and Swiss International Airlines to Extend Code-Share Flights II-79
• Japan Airlines and American Airlines Introduces Daily Code-Share Flights II-79
• Delta Airlines Launches Daily Service from Atlanta to Moscow II-79
• Delta Airlines Launches Services to India II-80
• Delta Airlines Launches Services to Oregon II-80
• Delta Airline and Alaska Airlines to Introduce Code-Share Services II-80
• Delta Airlines Unveils Florida and New Intra-Florida to Savannah Flights II-80
• Continental Airlines Launches Services to Texas and Mexico City II-80
• Continental airlines starts New Services from Houston II-80
• Continental Airlines Initiates Nonstop Flights from New York to Punta Cana II-80
• Continental Airlines Initiates Nonstop Flights II-81
• Continental Airlines Initiates Nonstop Flights Between Houston and Mexico II-81
• Continental Airlines Starts Nonstop Flights Between Houston and Mexico II-81
• Continental Airlines Introduces Nonstop Flights to Houston II-81
• Continental Airlines Unleashes Nonstop Service Between Tucson, Ariz., and New York II-81
• Continental Airlines Introduces Nonstop Services Between Honolulu and Nagoya, Japan II-81
• Continental Airlines Releases Nonstop Services Between Houston and Huatulco, Mexico II-81
• Continental Airlines Offers Nonstop Services Between Bristol and New York II-81
• Continental Airlines Unveils Non-Stop Air Services II-81
• Continental Airlines Launches Services to Texas and Mexico City II-81
• Continental Airlines Introduces Service Between New York and Belfast II-82
• Continental Airlines Unveils Non-Stop Flight Services to Berlin II-82
• Continental Airlines Introduces Daily Non-Stop Services to Hamburg II-82
• Continental Airlines Launches Services Linking New York and Stockholm II-82
• Continental Airlines Rolls Out Services to Del Rio II-82
• Continental Airlines Launches New Service to Mexico Destinations II-82
• Cathay Pacific Offers Daily Flights to Colombo II-82
• Cathay Pacific Introduces Flights to Taipei, Sapporo II-83
• Cathay Pacific Introduces Direct Service to Moscow II-83
• Cathay Pacific Rolls Out Daily Non-Stop Service To New York II-83
• Cathay Pacific Introduces 3rd Daily Sydney Service II-83
• Cathay Pacific Unveils Daily Services to Beijing II-83
• Cathay Pacific to Recommence Taiwan services II-83
• Cargolux Reintroduces Flight to Kinshasa II-83
• Cargolux Starts Flight Service Between Asia and Spain II-84
• Cargolux Releases Flights to Budapest II-84
• Cargolux Introduces Service to Kenya II-84
• Cargolux Launches Lusaka Service II-84
• Cargolux Unveils 3rd Flight to Sao Paulo and Curitiba II-84
• Cargolux Rolls Out Second Flight to Lagos/Nigeria II-84
• Cargolux Launches Fourth Flight to Budapest II-85
• British Airways Introduces New Flight Schedule II-85
• British Airways offers Sleeper Service II-85
• British Airways CitiExpress Rolls Out Three New routes from Birmingham II-85
• British Airways Offers Better Food Facilities for Club Europe II-85
• America West Introduces New Flights II-85
• America west Releases New Flights from San Francisco II-86
• America west Releases New Flights from Las Vegas II-86
• America west announces New Flights to Kalispell II-86
• America west Launched New Website II-86
• America west introduces new service II-86
• America west Launches New Flights Between Las Vegas Hub and Burbank II-86
• America west Releases Non stop Service between Phoenix and Toronto II-86
• America west Airlines Adds New Flights II-86
• America West Airlines Unveils New Non-Stop Flights from San Diego II-86
• America West Airlines Introduces New Service from Las Vegas II-86
• America West Airlines Rolls Out New Services to Las Vegas and Idaho II-87
• America West Airlines Introduces New Service from Las Vegas II-87
• America West Airlines Starts New Flights II-87
• America West Airlines Initiates Flights Connecting Los Angeles and Vancouver II-87
• America West Airlines Introduces Non-Stop Services to California II-87
• American Airlines Introduces New Flights II-87
• America West Airlines Launches Flights between Los Angeles and Edmonton II-87
• America West Airlines Unveils New Nonstop Service from Sioux Falls II-88
• America West Introduces New Services II-88
• America west Releases New Flights between Phoenix Hub and Ronald Reagan Washington National Airport II-88
• America west Launches Flights Between Los Angeles and Washington, D.C II-88
• America West Initiates Non Stop Services II-88
• America West Airlines Unveils New Nonstop Service from Sioux Falls II-88
• Air New Zealand Unveils New Routes with Wellington - Nadi Direct Service II-88
• Air New Zealand Increases Trans-Tasman Flights II-89
• Air New Zealand Launches New Service to San Francisco II-89
• Air New Zealand Launches Non-Stop Services to Los Angeles II-89
• Air New Zealand Expands Weekly Services to Auckland II-89
• Air New Zealand Introduces Non- Stop Services to Fiji II-89
• Air New Zealand Launches Services between Christchurch and Rarotonga II-90
• Air France Launches "Dedicate" Service II-90
• Air France and Delta Air Lines Introduce Electronic Ticketing II-90
• Air France Introduces A330-200 aircraft on the Paris-Philadelphia Route II-90
• Air France Unveils Non-Stop Services Linking Paris and Vietnam II-90
• Air France Receives Delivery of Boeing 777-300ER II-90
• Air France Reopens Non-Stop Services Linking Paris-CDG2 and Teheran II-91
• Air France Introduces Service to Tashkent from Paris-Charles de Gaulle II-91
• Air France Introduces Services to Baiyun II-91
• Air France Rolls Out Paris - Riyadh Non-Stop Services II-91
• Air France Introduces Air Services Linking Paris-CDG2 and Ljubjlana II-92
• Air Canada unveils New Flights Between Montreal and Europe II-92
• Air Canada Launches Latitude Pass II-92
• Air Canada Unveils New Flights to Rome II-92
• Air Canada Launches New Flights from Toronto to Hong Kong II-92
• Air Canada Introduces Non-stop Flights to Bogota and Caracas II-92
• Alitalia Unveils New Flights to Destinations at Large II-92
• Air Canada Introduces new Flights for Winter II-93
• Air Canada Cargo Introduces Freighter Service II-93
• Air Canada Unveils New Flights to Lima II-93
• Air Canada Launches New Flights Between Sydney, Australia and Vancouver II-93

11. Focus on Select Players II-94

• Air Canada (Canada) II-94
• Air France (France) II-94
• Air New Zealand (New Zealand) II-94
• Alitalia (Italy) II-94
• American Airlines (USA) II-94
• America West Airlines (USA) II-94
• Asiana Airlines (South Korea) II-95
• British Airways (UK) II-95
• Cargolux (Luxembourg) II-95
• Cathay Pacific (Hong Kong) II-95
• Continental Airlines (USA) II-95
• Delta Airlines (USA) II-95
• Iberia (Spain) II-96
• Japan Airlines System Corporation (Japan) II-96
• KLM Royal Dutch Airlines (Netherlands) II-96
• Korean Air (South Korea) II-96
• Lufthansa (Germany) II-96
• Northwest Airlines (USA) II-97
• Qantas (Australia) II-97
• Southwest Airlines (USA) II-97
• United Airlines (USA) II-97

12. Global Market Perspective II-98

• Table 38: World Recent Past, Current & Future Analysis for Airlines by Geographic Region - US, Canada, Japan, Europe, Asia-Pacific, (excluding Japan), Latin America, and Middle East & Africa Markets Independently Analyzed by Passenger Traffic for the Years 2001 through 2010 in RPKs (Revenue Passenger Kilometers) Billion (includes corresponding Graph/Chart) II-98
• Table 39: World Recent Past, Current & Future Analysis for Airlines by Geographic Region - US, Canada, Japan, Europe, Asia-Pacific, (excluding Japan), Latin America, and Middle East & Africa Markets Independently Analyzed by Freight Traffic for the Years 2001 through 2010 in FTKs (Freight Ton Kilometers) Billion (includes corresponding Graph/Chart) II-98
• Table 40: World Historic Review for Airlines by Geographic Region - US, Canada, Japan, Europe, Asia-Pacific, (excluding Japan), Latin America, and Middle East & Africa Markets Independently Analyzed by Passenger Traffic for the Years 1991 through 2000 in RPKs (Revenue Passenger Kilometers) Billion (includes corresponding Graph/Chart) II-99
• Table 41: World Historic Review for Airlines by Geographic Region - US, Canada, Japan, Europe, Asia-Pacific, (excluding Japan), Latin America, and Middle East & Africa Markets Independently Analyzed by Freight Traffic for the Years 1991 through 2000 in FTKs (Freight Ton Kilometers) Billion (includes corresponding Graph/Chart) II-99
• Table 42: World 20-Year Perspective for Airlines by Geographic Region - Percentage Breakdown of RPK for US, Canada, Japan, Europe, Asia-Pacific, (excluding Japan), Latin America, and Middle East & Africa Markets for the Years 1991, 1995, 2005 & 2010 (includes corresponding Graph/Chart) II-100
• Table 43: World 20-Year Perspective for Airlines by Geographic Region - Percentage Breakdown of FTK for US, Canada, Japan, Europe, Asia-Pacific, (excluding Japan), Latin America, and Middle East & Africa Markets for the Years 1991, 1995, 2005 & 2010 (includes corresponding Graph/Chart) II-100

III. MARKET

1. The United States III-1

• A. Market Analysis III-1
• Current and Future Analysis III-1
• Historic Review III-1
• Airlines Industry: An Overview III-1
• Trends and Issues III-1
• After Effects of 9/11 Attacks III-1
• Routes: The First Casualty III-2
• Anti-Hijacking Steps III-2
• Small Airlines: Trend Toward Cutting of Business Fares III-2
• Cost Cutting Measures of Airlines III-2
• Special Meals: Out of the Window III-2
• Slashing Agent's Commission: A Survival Tactic III-2
• Senior Citizen Discounts: No Longer There III-3
• Doing Away With Restrictions III-3
• Outsourcing Pilot Training Programs III-3
• Use of Technology III-3
• Financial Support: Off the Agenda? III-3
• Row Over Web Fare Access III-3
• Operating Costs: A Look III-4
• High Operational Costs Trim Major US Airline Profits III-4
• Year 2005 estimated to Remain Gloomy for the Airline Industry III-4
• US Airline Industry in Peril III-4
• The US Airlines Industry Trapped Between Customers and Competitors III-5
• US Airlines Cargo Returns to Profitability III-5
• US Airlines Still Remain Cost Competitive III-5
• Impressing the Customer III-5
• US Airlines Target Central and Eastern European Markets III-5
• US Based Airlines Plan to Mark their Presence in Asia III-6
• Consolidation - An Option to Return Back to Profitability III-6
• Central American Airlines III-6
• Regulation and Beyond: A Look III-6
• Equitime: A Risk Retention Group by US Airlines III-7
• Charter Industry: Basking in the Limelight III-7
• Commission Cuts Boost Charter Industry III-7
• FAA Moots Reduced Vertical Separation Minima Rule III-7
• Paper Costs More III-7
• Southwest Airlines: Defying Industrial Trend III-8
• Regional Jet Expansion III-8
• Table 44: Leading Airlines in the US by Number of Passengers Carried in First Five Months in 2002: Alaska, America West, American, American Eagle, Continental, Delta, Northwest, Southwest, United, and US Airways (In Million) (includes corresponding Graph/Chart) III-8
• Table 45: Leading Airlines in the US by Passenger Traffic in First Five Months in 2002: Alaska, America West, American, American Trans Air, Continental, Delta, Northwest, Southwest, United, and US Airways (In Billion RPK) (includes corresponding Graph/Chart) III-9
• Table 46: Leading Airlines in the US by Freight Traffic in First Five Months in 2002: FedEx, UPS, Northwest, United, American, Delta, Continental, US Airways, DHL, and Southwest (In Million FTK) (includes corresponding Graph/Chart) III-9
• Table 47: Leading Airlines in the US in 2000 by Revenue: Airborne Express, Alaska Air Group, America West Airlines, American Airlines, Continental Airlines, Delta Air Lines, DHL Airways, FedEx Express, Northwest Airlines, Southwest Airlines, TWA Airlines, United Airlines, UPS, and US Airways (In US$ Billion) (includes corresponding Graph/Chart) III-10
• Table 48: US Air Cargo Market: Breakdown by Domestic Market Share in 2000 for Airborne Express, FedEx, UPS, US Postal Service, and Others (includes corresponding Graph/Chart) III-10
• Table 49: Leading Airlines in the US by Food/Meal Expenditure for the First Nine Months of 2001: Alaska, America West, American, American Trans Air, Continental, Delta, Northwest, TWA, United Airlines, and US Airways (In US$ Million) (includes corresponding Graph/Chart) III-11
• Table 50: Leading Airlines in the US by Food/Meal Expenditure in 2000: Alaska, America West, American, American Trans Air, Continental, Delta, Northwest, TWA, United, and US Airways (In US$ Million) (includes corresponding Graph/Chart) III-11
• Table 51: Leading Regional & Specialty Airlines in the US by Number of Passengers Carried in First Five Months in 2002: Atlantic Coast, Chicago Express, Era, Great Lakes, Gulfstream, Mesa Air Group, Miami Air, North American, Omni Air, Pace, Pan Am, Pinnacle, Skyway, SkyWest, and US Airways Express (In Thousand) (includes corresponding Graph/Chart) III-12
• Table 52: Leading Regional & Specialty Airlines in the US by Number of Passengers Carried in 2001: US Airways Express, SkyWest, Atlantic Coast, Mesa Air Group, Express Airlines I, Great Lakes, Gulfstream, Omni Air, Chicago Express, Cape Air/Nantucket, Skyway, North American, Miami Air, Era, Pan Am, Casino Express, Transmeridian, Southeast, Falcon, Sun World, Pace, Planet, Allegiant, Sierra Pacific, and Tatonduk (In Thousand) (includes corresponding Graph/Chart) III-13
• Table 53: Leading Airlines in the US: Breakdown by Domestic Market Share in 2001 for American, Delta, United Airlines, South West, North West, Continental, US Airways, America West, Alaska Airlines, and Others (includes corresponding Graph/Chart) III-14
• Table 54: Leading US Airlines by Punctuality in 2001: Continental, Delta, Northwest, Southwest, and US Airways (includes corresponding Graph/Chart) III-14
• Table 55: Leading Airlines in the US by Passenger Traffic in 2001: United, American, Delta, Northwest, Continental, Southwest, US Airways, America West, TWA, Alaska, and American Trans Air (In RPK Billion) III-14
• Table 56: Leading Airlines in the US: Breakdown by Available Seat Miles in 2001 for America West, American, Continental, Delta, Northwest, Southwest, United, US Airways, and Others (In Million) (includes corresponding Graph/Chart) III-15
• Table 57: Leading Airlines in the US: Percentage Breakdown of Revenue Passenger Miles in 2001 for Alaska, America West, American, ATA, Continental, Delta, Northwest, Southwest, United, US Airways, and Other (includes corresponding Graph/Chart) III-15
• Table 58: Leading Airlines for Federal Government in the US: Percentage Breakdown in 2001 for American Airlines, Continental, Delta, Northwest, Trans World Airlines, U.S. Airways, United Airlines, and Others (includes corresponding Graph/Chart) III-16
• Table 59: Leading Airlines in the US: Breakdown by Online Sales for Alaska, American, Continental, Delta, Northwest, Southwest, United, and US Airways (In US$ Million) (includes corresponding Graph/Chart) III-16
• Table 60: Leading Regional/Specialty Airlines in the US by Number of Passengers Carried in 2001: US Airways Express, SkyWest, Atlantic Coast, Mesa Air Group, Express Airlines I, Great Lakes, Gulfstream, Omni Air, Chicago Express, Cape Air/Nantucket, Skyway, North American, Miami Air, Era, Pan Am, Casino Express, Transmeridian, Southeast, Falcon, Sun World, Pace, Planet, Allegiant, Sierra Pacific, and Tatonduk (In Million) (includes corresponding Graph/Chart) III-17
• Table 61: Leading Regional/Specialty Airlines in the US by Passengers Traffic in 2001: Atlantic Coast, Mesa Air Group, SkyWest, US Airways Express, Omni Air, North American, Express Airlines I, Miami Air, Pan Am, Transmeridian, Great Lakes, Casino Express, Skyway, Sun World, Gulfstream, Southeast, Pace, Planet, Chicago Express, Falcon, Sierra Pacific, Era, Allegiant, and Tatonduk (In RPK Million) (includes corresponding Graph/Chart) III-18
• Table 62: Leading Regional Airlines in the US by Number of Passengers Carried in 2000: American Eagle Airlines, Atlantic Southeast, Comair, Continental Express, Horizon Air, Mesa Airlines, Mesaba Airlines, SkyWest Airlines, and US Airways Express (In Million) (includes corresponding Graph/Chart) III-19
• Table 63: Leading Low-Cost Airlines in the US: Breakup by Number of Enplanements in 2001 for ATA, Frontier, JetBlue Airways, Southwest, Sun Country, and Vanguard (In Million) (includes corresponding Graph/Chart) III-19
• Table 64: Leading Airlines in the US: Breakdown by Unit Cost in Cents for One-Mile Flown Per Seat in 2001 for Continental, Delta, JetBlue, Northwest, and Southwest (includes corresponding Graph/Chart) III-19
• Table 65: Top ten Airlines in the US Ranked by Total Sales in US$ Billion (2004): American, United, Delta, Northwest, Continental, Southwest, US Airways, Alaska Air, America West and ATA (includes corresponding Graph/Chart) III-20
• Table 66: Top US Airlines Ranked by Net Earnings in US$ Million (2003): US Airways, Southwest, Northwest, America West, Continental, ATA Airlines and Alaska (includes corresponding Graph/Chart) III-20
• Recent Industry Activity III-21
• Industry Activity in the Recent Past III-23
• Service Launches III-32
• Service Launches in the Recent Past III-45
• Focus on Select Players III-46
• B. Market Analytics III-47
• Table 67: US Recent Past, Current & Future Analysis for Airlines - Passenger Traffic Independently Analyzed for the Years 2001 through 2010 in RPK (Revenue Passenger Kilometer) Billion (includes corresponding Graph/Chart) III-47
• Table 68: US Recent Past, Current & Future Analysis for Airlines - Freight Traffic Independently Analyzed for the Years 2001 through 2010 in FTK (Freight Ton Kilometer) Billion (includes corresponding Graph/Chart) III-48
• Table 69: US Historic Review for Airlines - Passenger Traffic Independently Analyzed for the Years 1991 through 2000 in RPK (Revenue Passenger Kilometer) Billion III-48
• Table 70: US Historic Review for Airlines - Freight Traffic Independently Analyzed for the Years 1991 through 2000 in FTK (Freight Ton Kilometer) Billion (includes corresponding Graph/Chart) III-48

2. Canada III-49

• A. Market Analysis III-49
• Current And Future Analysis III-49
• Historic Review III-49
• Industry Overview III-49
• A Look on Lop-Sided Competition III-49
• Table 71: Leading Airlines in Canada: Percentage Breakdown by Domestic Market Share for 2001-2000 for Air Canada, Canada 3000, WestJet, and Other (includes corresponding Graph/Chart) III-50
• $ Vs $: Advantage Canada III-50
• Canadian Chamber of Commerce Roots for Open Skies Policy with US III-50
• Recent Industry Activity III-50
• Industry Activity in the Recent Past III-51
• Service Introductions III-53
• Air Canada - A key Player III-55
• B. Market Analytics III-55
• Table 72: Canadian Recent Past, Current & Future Analysis for Airlines - Passenger Traffic Independently Analyzed for the Years 2001 through 2010 in RPK (Revenue Passenger Kilometer) Billion (includes corresponding Graph/Chart) III-55
• Table 73: Canadian Recent Past, Current & Future Analysis for Airlines - Freight Traffic Independently Analyzed for the Years 2001 through 2010 in FTK (Freight Ton Kilometer) Billion (includes corresponding Graph/Chart) III-55
• Table 74: Canadian Historic Review for Airlines - Passenger Traffic Independently Analyzed for the Years 1991 through 2000 in RPK (Revenue Passenger Kilometer) Billion (includes corresponding Graph/Chart) III-56
• Table 75: Canadian Historic Review for Airlines - Freight Traffic Independently Analyzed for the Years 1991 through 2000 in FTK (Freight Ton Kilometer) Billion (includes corresponding Graph/Chart) III-56

3. Japan III-57

• A. Market Analysis III-57
• Current and Future Analysis III-57
• Historic Review III-57
• Japan: Trying Hard to Attract Tourists III-57
• SARS Strangles Tourism in Japan III-57
• Japan Air System and All Nippon Airways Receive Emergence Aid III-58
• Japanese Airlines Feature High Unit Cost III-58
• Japanese Airline Industry Undergoes Deregulation III-58
• Business Travel Between Japan and China Set to Rise III-58
• Table 76: Leading Airlines in Japan: Breakdown by Domestic Flights Market Share in 2000 for Air Nippon, All Nippon Airways, Japan Air System, Japan Airlines, Japan TransOcean Air, and Others (includes corresponding Graph/Chart) III-58
• Recent Industry Activity III-59
• Industry Activity in the Recent Past III-60
• Service Launches III-63
• Japan Airlines System Corporation - A Key Player III-64
• B. Market Analytics III-65
• Table 77: Japanese Recent Past, Current & Future Analysis for Airlines - Passenger Traffic Independently Analyzed for the Years 2001 through 2010 in RPK (Revenue Passenger Kilometer) Billion (includes corresponding Graph/Chart) III-65
• Table 78: Japanese Recent Past, Current & Future Analysis for Airlines - Freight Traffic Independently Analyzed for the Years 2001 through 2010 in FTK (Freight Ton Kilometer) Billion (includes corresponding Graph/Chart) III-65
• Table 79: Japanese Historic Review for Airlines - Passenger Traffic Independently Analyzed for the Years 1991 through 2000 in RPK (Revenue Passenger Kilometer) Billion (includes corresponding Graph/Chart) III-66
• Table 80: Japanese Historic Review for Airlines - Freight Traffic Independently Analyzed for the Years 1991 through 2000 in FTK (Freight Ton Kilometer) Billion (includes corresponding Graph/Chart) III-66

4. Europe III-67

• A. Market Analysis III-67
• Current and Future Analysis III-67
• Historic Review III-67
• Trends & Issues III-67
• Block Exemption Renewal III-67
• Regulations: A Brief Overview III-67
• Infrastructure Issues III-68
• EU Approves European Aviation Safety Agency (EASA) III-68
• EC Fines SAS and Maersk Airlines III-68
• Association of European Union and EC Announce New Guidelines III-68
• Eurocontrol: A Brief Look III-68
• Eurocontrol Okays RVSM III-69
• Online Sales: Upping the Ante III-69
• Business Travelers: Changing Preferences III-69
• Europe - Still Reviving From Aftereffects of SARS and Iraq War III-69
• Low cost Carriers Grip Over the European Market III-70
• European Airlines Post Losses in 2004 III-70
• Table 81: European Airline Types (2004): Percentage Breakdown by Value Sales for Scheduled, Charter, and Low fare (includes corresponding Graph/Chart) III-70
• Table 82: Leading Airlines in Europe in 2000 by Number of Passengers Carried: Air France, Alitalia, British Airways, Iberia, KLM, Lufthansa, Sabena, SAS, Swissair, and Turkish Airlines (In Million) (includes corresponding Graph/Chart) III-71
• Table 83: Leading Airline Groups in Europe in 2000 by Revenue: Aeroflot, Air France, Alitalia Group, Austrian Airlines, British Airways, Finnair, Iberia Group, KLM, LTU Group, Lufthansa Group, Sabena Group, SAS Group, Swissair Group, THY Turkish Airlines, and Virgin Group (In US$ Million) (includes corresponding Graph/Chart) III-71
• Table 84: Leading European Independent Airlines by Number of Passengers Carried in 2001: Condor Flugdienst, Spanair, Britannia Airways, Transavia, Airtours International, Hapag-Lloyd, Air 2000, Bmi British midland, LTU, JMC Airlines, Braathens, Air Berlin, Air Europa, Monarch, Virgin Atlantic, Aero-Lloyd, Premiair, Maersk Air, Futura, Martinair, Sabelair, Britannia AB, Germania, Eurofly, Sterling European, and DutchBird (In Million) (includes corresponding Graph/Chart) III-72
• Table 85: Leading Independent European Airlines by Passenger Traffic in 2001: Virgin Atlantic, Condor Flugdienst, Airtours International, Britannia Airways, Air 2000, LTU, Hapag-Lloyd, JMC, Monarch, Air Berlin, Spanair, Premiair, Transavia, Aero-Lloyd, Martinair, Air Europa, Britannia AB, Futura, Bmi British Midland, Sabelair, Maersk Air, Braathens, Sterling European, Germania, DutchBird, and Eurofly (In Billion) (includes corresponding Graph/Chart) III-73
• Table 86: Leading Low-Cost Airlines in Europe by Number of Passengers Carried in 2001: Buzz, Deutsche BA, easyJet, GO, Ryanair, and Virgin Express (In Million) (includes corresponding Graph/Chart) III-74
• Table 87: Leading Low-Cost Airlines in Europe by Fleet Size in 2002: Bmibaby, Buzz, EasyJet, Goodjet, Ryanair, and Virgin Express (includes corresponding Graph/Chart) III-74
• Table 88: Europe's Busiest Airports Ranked by Takeoffs and Landings in 2000: Charles de Gaulle, Frankfurt, Heathrow, Madrid, and Schiphol (In '000) (includes corresponding Graph/Chart) III-74
• Table 89: Leading Regional Airlines in Europe by Number of Passengers Carried in 2000: Crossair, Lufthansa CityLine, KLM uk, Delta Air Transport, Eurowings, Air Nostrum, British Regional, British European, KLM Cityhopper, and Binter Canarias (In Million) (includes corresponding Graph/Chart) III-75
• Table 90: Leading Western European Charter Airlines: Percentage Breakdown by Flight Delays Over 1 Hour in 2001 for Air 2000, Air Europa, BMI, Britannia Airways, Channel Express, Excel Airways, Iberworld, JMC Airlines, Monarch Airlines, and MyTravel Airways (includes corresponding Graph/Chart) III-75
• B. Market Analytics III-76
• Table 91: European Recent Past, Current & Future Analysis for Airlines by Geographic Region - France, Germany, United Kingdom, Italy, Spain, Russia and Rest of Europe Markets Independently Analyzed by Passenger Traffic for the Years 2001 through 2010 in (Revenue Passenger Kilometer) Billion (includes corresponding Graph/Chart) III-76
• Table 92: European Recent Past, Current & Future Analysis for Airlines by Geographic Region - France, Germany, United Kingdom, Italy, Spain, Russia and Rest of Europe Markets Independently Analyzed by Freight Traffic for the Years 2001 through 2010 in FTK (Freight Ton Kilometer) Billion (includes corresponding Graph/Chart) III-76
• Table 93: European Historic Review for Airlines by Geographic Region - France, Germany, United Kingdom, Italy, Spain, Russia and Rest of Europe Markets Independently Analyzed by Passenger Traffic for the Years 1991 through 2000 in (Revenue Passenger Kilometer) Billion (includes corresponding Graph/Chart) III-77
• Table 94: European Historic Review for Airlines by Geographic Region - France, Germany, United Kingdom, Italy, Spain, Russia and Rest of Europe Markets Independently Analyzed by Freight Traffic for the Years 1991 through 2000 in FTK (Freight Ton Kilometer) Billion (includes corresponding Graph/Chart) III-77
• Table 95: European 20-Year Perspective for Airlines by Geographic Region - Percentage Breakdown for RPK for France, Germany, United Kingdom, Italy, Spain, Russia and Rest of Europe Markets for the Years 1991, 1995, 2005 & 2010 (includes corresponding Graph/Chart) III-78
• Table 96: European 20-Year Perspective for Airlines by Geographic Region - Percentage Breakdown for FTK for France, Germany, United Kingdom, Italy, Spain, Russia and Rest of Europe Markets for the Years 1991, 1995, 2005 & 2010 (includes corresponding Graph/Chart) III-78

4a. France III-79

• A. Market Analysis III-79
• Current and Future Analysis III-79
• Historic Review III-79
• Trends & Issues III-79
• Low-Cost Airlines: Driving the Market III-79
• Anti-Hijacking Steps of Air France III-79
• Recent Industry Activity III-80
• Industry Activity in the Recent Past III-81
• Service Introductions III-82
• Air France - A Key Player III-84
• B. Market Analytics III-85
• Table 97: French Recent Past, Current & Future Analysis for Airlines - Passenger Traffic Independently Analyzed for the Years 2001 through 2010 in RPK (Revenue Passenger Kilometer) Billion (includes corresponding Graph/Chart) III-85
• Table 98: French Recent Past, Current & Future Analysis for Airlines - Freight Traffic Independently Analyzed for the Years 2001 through 2010 in FTK (Freight Ton Kilometer) Billion (includes corresponding Graph/Chart) III-85
• Table 99: French Historic Review for Airlines - Passenger Traffic Independently Analyzed for the Years 1991 through 2000 in RPK (Revenue Passenger Kilometer) Billion (includes corresponding Graph/Chart) III-86
• Table 100: French Historic Review for Airlines - Freight Traffic Independently Analyzed for the Years 1991 through 2000 in FTK (Freight Ton Kilometer) Billion (includes corresponding Graph/Chart) III-86

4b. Germany III-87

• A. Market Analysis III-87
• Current and Future Analysis III-87
• Historic Review III-87
• German Airlines Industry III-87
• Low Cost Airlines: Beginning to Explode III-87
• Table 101: Leading Low Cost Airlines in Germany by Fleet Type and Number of Seats Offered in 2002: DBA, Go, Ryanair, Buzz, germanwings, Hapag-Lloyd Express, Air Berlin, Berlinjet, and Otte Air (includes corresponding Graph/Chart) III-88
• Table 102: Leading Holiday Charter Airlines in Germany by Number of Passengers Carried in 2001: Aero Lloyd, Air Berlin, Condor, Eurowings, Fly FTI, Germania, Hapag-Lloyd Flug, LTU, and Sun Express (In Million) (includes corresponding Graph/Chart) III-88
• Recent Industry Activity III-88
• Industry Activity in the Recent Past III-90
• Service Introductions III-91
• Lufthansa - A Key Player III-91
• B. Market Analytics III-92
• Table 103: German Recent Past, Current & Future Analysis for Airlines - Passenger Traffic Independently Analyzed for the Years 2001 through 2010 in RPK (Revenue Pas