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