The changing face of the airline industry: a sign of better things to come?

Lingering economic woes and fuel price volatility have spelled difficult times for the airline industry over the past four to five years. It is perhaps fitting then that no group has been more affected than the scores of pilots and industry professionals either in search of a job or at the centre of widespread cutbacks in salary levels and employee benefits. However, with last year marking a significant improvement over 2009 conditions, recuperating a sustainable job market for the industry may indeed seem more within reach. In addition to predicted structural changes in the operational environment, such an outlook is being supported by optimistic growth forecasts over the next five years. Although whether further advancements will be felt on a global basis remains less certain, as the experts at AviationCV point out why some markets are less susceptible to encouraging change.

Current industry forecasts suggest favourable growth in airline revenues for the period leading up to 2017, averaging five percent in comparison to the meagre 2.9 percent growth that typified the past five years. This comes on the back of predicted rises in worldwide income levels and less volatility in crude oil prices, with last year alone showing aggregate airline earnings in the vicinity of $6.7 billion. Conducive to this expansion – 2013 is expected to display even higher earnings of $8.4 billion, while transporting some 3.1 billion passengers.

‘Despite the adverse conditions we were seeing during that time, including high fuel prices, slowing passenger growth, the euro-zone crisis and deepened political turmoil in certain regions – the fact that the industry as a whole is earning money is testament to the improved efficiency of airlines. What is interesting to note is the number of mergers that have taken place over recent years. We saw it in 2004 with Air France and KLM, successively over many years with Lufthansa and other European airlines, and most recently in 2011, when British Airways and Iberia consolidated their individual business units. The same has occurred in the US, whereby an industry once characterised by a wide of number of carriers has since reduced to merely a few dominant players. This process is, of course, part and parcel to the drive for greater efficiency in the industry,’ comments the CEO of AviationCV.com, Skaiste Knyzaite.

Further merger activity is forecast to happen over the next five years as the number of airlines in operation is to decline ever slightly. This could potentially prove good news for industry job-seekers as on average merged airlines have benefited from upshots in sales and further expansion opportunities, amid what was otherwise a stagnant industry. However, regardless of these broad changes, it is clear industry growth will continue along its skewed profile. Indeed, the growth of airlines in Asia, Africa and the Middle East is predicted to far outpace those in certain other regions – in some cases quadrupling forecasted data.

‘The success of gulf airlines in particular is measured by a number of variables. Yes, they have sustained a healthy level of investment over time but they are not burdened by various other obstacles that have inhibited the growth of airlines in say Europe, for example. While other parts of the world have implemented emission control schemes, higher taxes and night-time flying bans or otherwise restricted the expansion of airports and other infrastructure, the same does not apply for the gulf airlines in question. This has allowed them to prosper and, in turn, offer a greater share of opportunities to pilots and other industry personnel,’ asserts S. Knyzaite, CEO of AviationCV.com

‘For an industry that supports over 50 million jobs and more than $2 trillion in annual economic activity, its sustainability and growth is of global interest. However, it should be noted that consolidation or restricting the number of obstacles are not the sole two avenues for an airline to achieve greater efficiency. Indeed, many airlines have sought the benefits afforded by outsourcing certain operations – be they IT, ticketing or even recruitment in order to maintain a competitive advantage in this ever more challenging industry,’ comments the CEO of AviationCV.com, Skaiste Knyzaite.