Value creation model of the Airline industry is based on:

(1) the ways the organization conducts its business, treats its employees, customers, and the wider community,

(2) How they take care of their passengers, customer care and air-service quality, reservation system, ease of use, and safety, attendance and punctuality, and concerns for the environment.

(3) How profits or income derived from air-travel business are reused/ redeployed to help its future passengers and other stakeholders get better services or comforts, or facilities, while in transit or during the flight.

Thanks Brian...but I was also interested in the reasons why the Airline industry is not looking at a way of developing innovations that would do away with high jet fuel costs that are also increasing the costs of using Airlines? Can we say that Aeronautical Engineers are stuck in investing in this type of aircraft technology?

Hello Richard, 

There are quite different perspectives as far as your question and your response to Dr. Prasad's comments. First, the operational cost may not solely be determined by fuel prices but also from airport dues and landing costs. So, low cost carriers may find it more economical to switch to off - route airports, and in that way covering up high fuel prices. 

Second, as far as the economics of technological innovation are concerned, it is this thing called technology vignettes that basically determines the life cycle of each each technology currently being used, and thus the rate of adoption of new technologies appearing in the market place. In a not so relevant example think mules versus tractors for land cultivation. In some parts of the world they still use mules to cultivate the land although the new technology (tractors) exists and is more efficient. They are 'stuck' with this particular technology because for them it is either uneconomical to adopt the new technology, or they have developed excellent skills and training while using the existing technology that is very difficult for them to make the switch. 

I hope that all this makes some sense to your original question!!!