Current Trend of the Aviation Industry Anshika Motwani


Current Trend of the Aviation Industry

Anshika Motwani
Until recently, the commercial aviation industry wasn’t considered to be a good investment avenue. In fact, in 2013, billionaire investment mogul Warren Buffett called the sector a “death trap” for investors. However, the industry seems to have caught a break at last.
Here are significant trends influencing strategy formulation and implementation across the sector today:
Rising Passenger Demand and Rebounding Cargo Volumes
Passenger numbers are estimated to increase by about 7.19 percent to 4.1 billion this year, matching the pace of expansion in 2016 and significantly outpacing the 20-year trend growth rate of 5 percent.
Boost from Higher Capacity Addition
Capacity addition, measured in Available Seat Miles (ASM), has been growing at a much faster pace. Closely correlated with the growth of Gross Domestic Product (GDP), capacity addition increased by 6.3 percent globally during 2015-16, outstripping both demand and economic expansion.
Improving Operational Metrics
Intense investor scrutiny of balance sheets, particularly on the cost side, is something the industry has gotten used to, considering almost 100 airlines have gone bankrupt over the decades.
High Load Factors Driving Revenue
The trend of the past two years which saw occupancy levels hit all-time highs is likely to continue. IATA expects the average load factor to rise from 80.3 percent in 2016 to 80.6 percent this year.

Anshika Motwani 
Manager FinTech
AirCrews Aviation Pvt. Ltd.

Current Trend of the Aviation Industry
Anshika Motwani

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