Challenges To Airline Industry

Airline business is one of the business that is most susceptible to external influences. The recent event of the volcano ash cloud from Iceland had halted air traffic across Europe. Anything that induce fear, like the case of H1N1 or the terrorist attack will undoubtedly, affect the airline.


As an industry, it is one of the few industry that has been having accumulated loss continuously for the last decade. Please check the data at IATA.   For 2010, the financial forecast is, the airlines will loss around US5.6 billions globally. It is a colossal figure. It is the most significant challenge.


The other is of course security, the fear of 911, is still being felt by many, even though the real damage or loss is nothing compared that of the Iraq war.


I quote the words of  

Raymond Benjamin, Secretary General, ICAO: 
“I have joined ICAO as Secretary General at what can arguably be described as the most challenging period in the history of the air transport industry.”

On 15 September, IATA announced losses for airlines of $11 billion for 2009, revised figures for losses in 2008 of $16.8 billion and projections of $3.8 billion in losses for 2010, pushing recovery into 2011 at the earliest. Moreover, the aviation industry is being called upon to respond to pressure relating to the impact of aviation on climate change, the real possibility of Influenza A (H1N1) virus pandemics this year, the shortage of skilled aviation personnel, the unpredictability of oil prices and the inevitability of further ups and downs in the economy.

reference:http://www.iata.org/pressroom/airlines-international/october-2009/Pages/2009-10-09.aspx

The Airlines and Its Products

The airlines jobs are created to produce the products for the customers. Without the desired products, there will not be customers and without customers, there will not be the airline. Then let us review the two interrelated questions:

1. What are the customers needs and wants that the airline intends to satisfy?
2. What is the products, and how does the airlines meet the needs and wants of the customers?

Question 1: Customers needs and want.
There are differences between needs and wants. We will not discuss that here. The customers have the need to travel and to transport goods and products to another destination fast. Then if we ask further, why do people have to travel?. There may be a number of possibilities:

People travel because:
   a. To meet their customers for business or to meet the partner to discuss businesses.
   b. To visit friends and family.
   c. To study or perform religious activities.
   d. holidays and adventure

You notice that these needs have create the demand to travel. That mean travelling is NOT the real needs but it is derived or caused by other needs. These is called Derived Demand.

2. Question 2: How does an airline meets the demands.
 So an airline needs to provide the travelling facilities for the customers. It is  the seat of a flight forms the products of an airline.

to be continued............

Airport Operations and Services

Depending on how the airline structure itself, one of the areas that has to be manned is the airport operation and services.Just think of an aircraft coming to load off passengers and pickup passengers at an airport. These are the areas to be covered:
Passenger Handling (Traffic) and Baggage
1. Handle the check in of the passengers.
2. Handle the movement of the passengers until they get into the aircraft.
3. Manage the documentations.

Aircraft Handling
4. Handle the arrival and departure of the aircraft.
5. Handling the engineering and technical defects
6. Water and Toilet Servicing
7. Fuel the aircraft.

Food and Beverage
1. Remove the used trays and food from the aircrft
2. Replenish with new supplies of food and beverage

Cargo
1. Offload Cargo and Load new cargo.

All these activities create job opportunities. In the next postings we will identify  the job classification in airline.