Essay on The Airline Industry: Trends, Challenges, Strategies

1930 Words Feb 26th, 2011 8 Pages
THE AIRLINE INDUSTRY: Trends, Challenges, Strategies
John Wensveen, Ph.D.
Dean, School of Aviation Dowling College New York, USA President, Airline Visions
The University of Sydney Faculty of Economics and Business Leadership and Policy Seminar Series Sydney, Australia 23 February 2010

Presentation Objectives
• Provide background on the global industry • Present a regional analysis • Discuss current and future evolvement of the industry (trends) • Discuss challenges and strategies impacting the industry • Discuss the new breed of airlines • Discuss why airlines fail and how to achieve success

Background Section

3 Stages of Development Impacting the Airline Industry
• • • • Regulation
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limited but will increase over next 15 years Increased stability in the region Old aircraft fleet (i.e., B727)(Stage I and II)(average age is 18 years) Will need 1,000 new aircraft next 15 years to replace old technology Since 1992: airline integration; restructuring; commercialization – positive ‘Flag carrier’ to self-reliance, privatization, less governmental control Need for new management to cope with global trends Need autonomy in civil aviation authorities Need infrastructure Need personnel training Airlines to work together as partners Rise of LCC start-ups Airline losses of $700M in 2008

Latin America & Caribbean
• • • • • • • • • Moving toward liberalization Increased PAX growth and competition Increased alliances Developing corporate strategy and a competitive strategy to cope with competition Need for training Need for R&D Brand culture important Focus on safety Airlines losses of $300M in 2008

Latin American Challenges
• • • • • • • • Think as a “business” and not an airline Cost savings Focus governments on economic benefits the industry brings Airport privatization issues (failed?) User charges and accounting for money Taxes and use of proceeds Safety performance
– – – – – – Industry 1:1.5M; LA 1:550,000 (2006) 5% of traffic and 14% of incidents Invest in new technology Efficient use of infrastructure Operate aircraft effectively Discuss emissions trading

Environmental performance

• • • •

Infrastructure (airports) Liberalization issues

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