The global recession threw a one-two punch at the bottom lines of airlines in 2008-09, as passenger traffic fell and fuel costs and other expenses rose. To gauge the impact of these challenges, Forbes Insights, in association with CIT, a provider of transportation finance, surveyed 136 fleet and finance executives at airlines around the world. The survey identified many concerns that these executives will have to deal with over the coming years.
Selected Key findings from the survey
- Fuel costs remain the biggest challenge airlines are facing. While they take significant steps to mitigate the impact of fluctuating fuel prices, they are also concerned sudden spikes could play havoc with their profits.
- Emerging markets promise the greatest opportunity for growth. While U.S. and European carriers were dealing with the 2008-09 recession, airlines in other regions were increasing their fleets, number of routes, and seat capacities.
- There is no end in sight for airline industry consolidation. More than 80% of executives expect to see an increase in M&A activity over the next five years.
- Lucrative business travellers are a key component of future profitability. In addition, many airlines are turning to ancillary charges—such as fees for checked bags, food, or in-flight entertainment.
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