- These days, airlines are becoming safer, more efficient, and more profitable with savvier management teams.
- However, the problems that plague the airline industry have not gone away.
- The global nature of the industry makes it uniquely vulnerable to a multitude of elements ranging from insufficient infrastructure to disease epidemics to politics.
The state of the airline industry is strong. Around the world, the number of people flying increased by 6.6% in 2017.
Consolidation, coupled with relatively affordable fuel prices and increasingly savvy management teams has resulted in record profits for the industry.
However, the airline business is not without its problems. Any cursory look at today’s new will turn up any number of stories about dissatisfied customers or some facet of the industry under threat.
Even as profitability remains solid, the problems that plague airlines have not gone away. In fact, they have actually become more complex.
A former airline CEO once jokingly responded to my question about areas of concern in the future with “What aren’t we concerned about?”
It’s a fair response. The airline industry for all of its power and prestige is unique in the sheer number of factors that could negatively affect its business.
Over the past couple of years, airlines have experienced major disruptions caused by everything from electrical fires to catastrophic disease outbreaks.
Then there are also the challenges caused by the world’s ever-shifting economic and political climates. And let’s not forget about the issues created by changes in our actual climate.
The vulnerability of airlines to this multitude of factors has to do with the global nature of the business. The very things that make airlines so interesting and alluring are also the same things that threaten its well-being.
Here’s a closer look a handful of the challenges that plague the airline industry:
Not only are the skies over the US congested with air traffic, the airports from which the planes operate are also bursting at the seams.
The increase in the number flyers along with the airlines’ strategic shift towards increasing the frequency of flights, means more planes and more passengers.
This results in crowded airport terminals and an increase in the number of delays.
“At no time is the peril of this strategy more exposed than when the weather goes bad,” author and commercial airline pilot Patrick Smith wrote in a blog post. “In years past, snow or thunderstorms meant moderate delays and perhaps a cancellation or two. These days, a half inch of powder or a line of cumulonimbus brings the entire system to its knees.”
Even though the frequency of terrorist acts targeted at airliners has gone down, incidents like the shoe bombers and the tragic events of 9/11 serve as a reminder they remain a substantial and persistent threat.
As a result, airlines and security services around the world have to remain vigilant. Over the past 15 years, security screening procedures have become increasingly stringent. This has resulted in longer checkpoint wait times and complaints from the traveling public.
In many respects, the industry’s search for greater profitability has been to the detriment of passenger comfort.
For investors, the lower the unit costs the better. For airlines, an effective way to reach that target is to stuff more seats into each plane. In addition, airlines have become much more disciplined when it comes to flooding the market with additional flights. The capacity discipline along with a greater number of seats per plane has resulted in full planes with less room for individual passengers.
See the rest of the story at Business Insider
Source: FS – All – Economy – News
Airlines are making more money than ever — but they're facing a mountain of problems