Nickolas Sarlis M.B.A,
B.A(Hon) Political Science
Current Market Outlook
Purpose of the forecast
The current market outlook is our long term forecast of the air traffic volumes & demand.
The forecast helps shape our product strategy & guide long term business planning.
We start fresh every year, factoring the effects of current business conditions & developments into our analysis of the long term drivers of air travel.
Effects of market forces.
The Aviation industry continually adapts t market forces. Key among these are fuel prices, economic growth & development, environmental regulations, infrastructure, market liberalization, airplane capabilities, other modes of transport, business…show more content… Sources of ancillary revenue include fees for baggage, ticket change, extra amenities, annual subscriptions to premium services, frequent flyer programs (FFP), and even on board duty free sales. Some of the more innovative sources (such as annual subscriptions and FFP products like branded credit cards) generate handsome margins for the airline and promote brand loyalty. Such strategies helped the airlines improve profitability for 2013.
Improved profitability is allowing airlines to increase strategic investment for future growth.
Airlines are boosting investments to enhance their customer product offering and operating efficiencies. Example, in addition to new airplanes, airlines are investing in new information and mobile technology, upgraded cabin interiors for higher levels of service, and additional seats to improve unit costs. Some airlines are increasing equity investment in other airlines and cross border partnerships to solidify and expand networks. Reinvestment of profit into airline products enhances the long term growth prospects for the industry.
Airline strategies and business models
Strategic planning is a continual process for airlines. Plans must take into account the challenging and ever changing competitive environment as well as how passengers define value. Example, Business travelers are sensitive to flight times and expect a high level of service. Short haul business travelers