This project too was born out of random curiosity about an otherwise obvious-seeming phenomenon: the fact that airlines face extreme (high-amplitude in nerd speak) profit cycles. A similar phenomenon had already been observed and verified in the US, and on checking the stats out for Indian airlines, it could be seen that the same was going on in India as well. So, of course, I had to check for myself and find out concrete reasons for it. What proceeded was a mess of parametric models, sine regressions, and complex mumbo-jumbo about aircraft manufacturers and airline purchase managers that I definitely don't intend to explain all about. So here's a simple one-page version.

Objectives

The objective of this study was to observe airline profits statistically and regress them with respect to related variables such as fuel prices, and air travel demand to single out a reason for their cyclical nature.

Results

We found that the profit cycles for both world airlines as a whole and Indian airlines were not stable and that the main reason behind the instability was the rate at which airlines ordered their planes. 

Basically, the system could be stabilized if, at the peak/boom of the cycle, the airlines could taper down the ordering of aeroplanes by 40%. This would essentially lead to reduced costs and resulting solvency for the firms during recessionary phases.

It's also an interesting case study on how statistical modelling of profits can help companies remain solvent.