Global airlines can breathe a sigh of relief as the price of jet fuel – their single biggest cost item – has climbed down, but there is no shortage of obstacles on the horizon.
“There are numerous challenges both manmade and natural but this has always been the case,”
“It makes it critical for airlines to be 100 per cent focused on efficiency and cost management. Equally there is a need to be flexible and quick to adapt capacity according to any given crisis.”
Indeed, while the aviation industry celebrates its centenary, it remains constantly under threat from new challenges. Whether its the Ebola crisis in West Africa, geopolitical flashpoints, or the sagging global economy, the sensitive aviation industry feels the ripples of virtually every major economic and political event.
A perennial challenge for an industry that has razor-sharp margins is cost. In 2013, the global aviation industry safely transported 3.3 billion passengers to 50,000 routes, but made just under $18 billion in revenues. That’s $4.13 in profit per passenger.
Despite these unimpressive returns, industry players are hardly looking to keep their fleet grounded. Indeed, they are in expansion mode with as many as 1,400 airplanes expected to have been delivered to the industry at a cost of $150 billion last year.
While the industry has done a remarkable job handling costs and volatile fuel prices, it is being weighed down by regulations and excessive security measures that are becoming a feature of air travel.
The global airline industry contributes 3.4 per cent to the world’s GDP, and generates $2.4 trillion in economic impact annually, and is a crucial network that connects the global economy.
The global airline industry is also facing intense competition, especially from low-cost carriers in the developed world.
“Low cost carriers will succeed in any market. Everywhere on the planet, the majority of consumers love low fares,” Sorensen noted. “Full service airlines will survive, and perhaps thrive, where they can erect regulatory defenses to keep low cost carriers out. Beyond that, traditional airlines seem to have a natural advantage with long haul services.”
At the other end of the airline spectrum are the full-serviced players from the Gulf region that offer a superior quality of service and are demanding greater market share from the traditional players in the developed world. Luckily for the global aviation industry, the pie is getting bigger. Rising incomes, growing populations and more economic growth in less-developed markets is fueling growth.
Indeed, eight of the 10 fastest growing air travel markets in the world are expected to be in Africa. Meanwhile, the densely populated markets of China, the US, India, Indonesia and Brazil will emerge as the five fastest growing markets in terms of additional passengers per year, IATA forecasts show.
In 2003, Jaap took over the Italian executive search firm Kilpatrick™ and built up the business regionally to become a leading player in cross border searches, focusing on international searches for both MNC’s and Mid Caps trying to define key players.
Jaap has built a reputation with both clients and candidates that are based on superior communication and project results that exceed expectations. Working at the highest levels, he has successfully built teams for early-stage clients as well as reinvigorated established organizations with new talent.
Jaap’s specialty is to manage the cultural differences aiming at the best possible return on investment for both company and executive.
Since 2013 Jaap is the Global CEO of the Kilpatrick Group SA to whom belong the following companies: Kilpatrick Executive Search ™, Kilpatrick Solutions, Kilpatrick Aviation and Gemini Executive Search ™ and employs 80+ professionals in the Americas, Middle East, Asia and Europe.
Cross boarder specialist
Gale LaRoche has extensive experience in Human Resources Management for both the public and private sector. Her specialty is bringing strategic HR best-practices and technology to help organizations operate in a more effective and efficient manner. Gale has a wealth of experience in starting up and turning around inefficient HR departments to be effective and strategic partners to the business. Gale’s recent assignment in the U.S. was with the Detroit Metropolitan Airport as Vice President, Human Resources.
Gale is a licensed attorney specializing in labor and employment law, and holds the following degrees: Ph.D. in Organizational Behavior Psychology; Juris Doctorate; Masters of Science with concentration in Human Resources; Bachelor of Arts in Human Resources; and an Associate of Applied Science in Business Management. She holds a SHRM-SCP designation. Her dissertation is on the topic of the dynamics involved when there is a change in the top leadership role in United States airports and how it affects senior managers.