Singapore Airlines
Current trends in the airline industry
Development of the airline industry post-9/11
Generally, it can be said that the US airline companies struggled much longer to recover from the 9/11 impact than companies in the rest of the world. See the appendix figure 1 in order to get an overview of the profit margins of the airline industry worldwide and figure 2 in order to see how US airlines are starting to recover from 9/11.
Trends in the Airline Industry
Most airlines operate both on a domestic and international level. There is a trend of state-owned airline companies to become privatized. There is no single trend in the global airline industry. While some aviation markets are saturated, stagnating, or even declining, others are still growing and become more deregulated, offering opportunities. Therefore, the focus in the analysis of trends for the airline industry is divided into saturated and emerging markets. First, the analysis deals with various threats to the airline companies, then some opportunities are shown.
Threats
There is an increased pressure to cut cost in the airline industry because of increasing jet fuel prices, decline in demand because of global recession, saturation of markets, and high taxes on flights in the EU.
Increased jet fuel prices
The prices of fuel are rising constantly, reaching a new record putting downward pressure on the profit margin of the airline industry. From 2000 until 2008, the price increased by more than 350 %. The International Air Transport Association (IATA) expects the global airline industry to face losses of US$5.2 billion in 2008 based on an average crude oil price of $ 113 per barrel and $ 140 for jet fuel. The price dropped slightly in the last month, but it will remain high in the future. See Figure 3 in the appendix to get an impression of how the level of oil price affects the level of consumer...
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