Trends in aviation industry

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Aviation includes all non-scheduled civil flying, both private and commercial. General aviation may include business flights, air charter, private aviation, flight training, ballooning, parachuting, gliding, hang gliding, aerial photography, foot-launched powered hang gliders, air ambulance, crop dusting, charter flights, traffic reporting, police air patrols and forest fire fighting.

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Trends in aviation industry

  1. 1. Trends in Aviation Industry
  2. 2. Contents : Introduction.  Trends in Aviation.  Innovative Ideas promoting the industry.  Trends in Indian Aviation Industry.  Critical Financial Issues & Strategies.  Why airlines fails to achieve Success ?  How airline can achieve success ?
  3. 3. The aviation industry encapsulates thedevelopment, operation and management of aircrafts. While thecommon perception about the sector is that it‟s only about pilots andairhostesses, there are numerous other, equally significant joboptions that the industry cannot function without; from in-flighttrainers and aircraft maintenance engineers to baggage handlers andreservations agents. Research indicates the global aviation industry is poised togrow at a healthy 5.6% CAGR (compound average growth rate)over the next 15 years. While major conventional mature marketssuch as the US and Europe will witness a significant fall in marketshare from 61% to 52%, emerging markets, such as India, Chinaand the Middle East, offer a great growth potential.
  4. 4. Trends in Aviation Industry Compared to other transport modes like road transport, trains orshipping the traffic increase in civil aviation is a relatively recentphenomenon. Passenger air transport became relevant around 1940.Following aspects contribute to the trends in aviation industry.  The trend in passenger numbers and total flights  The trend in engine development and efficiency  The trend in understanding impacts of aviation on atmosphere and climate
  5. 5. 1.The trend in passenger numbers and total flights Civil aviation for widespread transport of citizens didnot really start before the second world war. Before, aircraftswere mainly constructed for military purposes. After thewar, many qualified pilots were available and still many planessuitable for transport of passengers as “left over” from the waras well. This caused a first boom in civil aviation, at thebeginning in particular in the United States. Soon, it became acommon trend in all industrialized countries in the world.
  6. 6. The following pictures give an impression, howquickly passenger planes with high capacity aredeveloped in the world.
  7. 7. The Boeing 247 was a civil aircraft produced in the United States since 1933. Besides from 3 staff members it could transport 10 passengers.The Junkers 90 was available inGermany since 1938. Designedfor 40 passenger it was one ofthe largest passenger aircraftsbefore the war but neverproduced in large numbers.
  8. 8. The Douglas C54 Skymaster / DC-4 has been produced since 1942 in the United States for 30- 40 passengers. It became together with the Douglas DC-3 famous as “Rosinenbomber” during the blockade of Berlin from June 1948 to May 1949.10 years later: The DouglasDC 7 (produced 1952 – 1958)was the biggest propelleraircraft with space for 100passengers and the last majorpiston engine poweredplane, coming just a few yearsbefore the advent of jetaircraft.
  9. 9. 2. The trend in engine development and efficiency Most passenger aircrafts use nowadays jet engines(turbojets and turbofans) which dominate civil aviation since the1960s. While airlines have been for some decades under theauthority of the respective states, latest with the internationalliberation of the markets the consumption of fuel became animportant factor in the competition. Therefore, not only environmental but also economicinterests drive the permanent improvements of engineefficiency. However, these improvements never compensatedfor the increase in passenger kilometers flown and therefore fueldemand and carbon dioxide emissions.
  10. 10. 3. The trend in understanding impacts of aviation on atmosphere and climate In the late 1960s aircraft engineers thought about theconstruction of a supersonic aircraft fleet. At this time theunderstanding of atmospheric processes was sufficiently advanced inorder to see risks in such plans. Scientists discussed the potentialimpact on the ozone layer, which raised strong concerns, before awider development of the technology was seriously approached. Since the supersonic fleet was never developed, also fortechnical and economic reasons, attention of science shifted in the1990 more to ozone development in the upper troposphere(here, ozone is a strong greenhouse gas) und greenhouse effects ingeneral. Besides from easier to estimate direct carbon dioxideemissions, in particular the impacts of condensations trail andpotentially developing cirrus clouds have been of special interest.
  11. 11.  In - flight beverages go functional
  12. 12. Virgin America Passengers can register for the US elections at 35,000ft Aeroflot teams up with nutritionexperts to develop in-flight „sports menu‟for the 2012 London Olympics
  13. 13.  American Airlines embarks on ambitious upgrade program -- Fleet Modernization -- Long haul fleet upgrades
  14. 14.  Tesco trials virtual grocery shopping at Gatwick Airport Airlines „crew-source‟ new on boardduty free products
  15. 15. Austrian gives passangers the option to purchase a premiummeal at the airport
  16. 16.  Consolidation in aviation sector The number of passengers traveling by air is on the rise For the traveling public, price is paramount in choosing a carrier Capacity is growing without much constraint Cost structures will continue to handicap legacy carriers as they compete with newer airlines, as well as with overseas carriers Oil prices are not expected to fall Outsourcing
  17. 17. Critical Financial Issues & Challanges• Cost Controls • World Economy• Access to Capital Markets • Irrational Pricing and• Insurance Predatory Action by Major• Foreign Currency Exposure Carriers• Fleet Replacement and Price • Over-Capacityof New Aircraft • Cash Flow and Ability to• Industry Losses and Self-FinanceInconsistent Profitability • Debt/Equity Ratios• Cost of Funds and Low • TaxationYield on Surplus Funds • Ownership Issues• Productivity and LaborReform
  18. 18. Why airlines fails to achieve success ?•Overexpansion• Undercapitalization•Lack of flexibility•“Wrong” leadership•“Wrong” money•Unable to obtain sustainable, competitive advantage•Failure to demonstrate revenue growth andprofitability
  19. 19. How airline can achieve success ?• Solid “airline” business plan• Flexibility• Diversity• Leadership• Steady and moderate growth strategies• Effective cost cutting strategies• Fleet commonality• Reasonable capital requirements• Long-term vision
  20. 20. Presented By …… Ajay Joshi Vigneshwar Vivek Vinay

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