Economic on Air Transport Management - amazonia.fiocruz.br

As with any other industry, the commercial air transport industry is affected Manatement events and changes in the global and local external environment. Given that it is a volatile industry that experiences cyclical peaks and troughs, any airline that does not manage its cost metrics will quickly be faced with operational and financial difficulties, as alluded to by Kelleher in the opening quote.

The focus of Economic on Air Transport Management chapter moves from the structure and theoretical economics of the airline industry discussed in the previous chapters to the current business environment in which the industry operates. To do this, the chapter is divided into four distinct topics that cover the business environment in which the air transport industry operates.

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A discussion of just the air transport industry is insufficient as it only Economic on Air Transport Management the events that occurred within the industry and fails to properly contextualise the greater issues in the broader environment that have shaped the circumstances that prevail within the industry itself. The chapter starts with a review of the global economic situation, which includes trends in GDP, inflation, oil, trade, employment, and exchange rate article source. Each of these have a significant impact on the air transport industry.

The second topic to be reviewed is the South African economic classification and demographics in order to establish the position of the South African consumer and their ability to engage in air travel. In this regard, a brief overview is given of the overall global tourism environment followed by a discussion on the South African tourism industry foreign and domestic. An understanding of the state of travel and tourism is essential in understanding the levels of demand and supply in the air transport industry, and thus essential for future strategic planning by the airlines.

Principles of Economics with Applications in the Air Transport Industry

Finally, an overview is given on global opportunities and risks that exist in the external environment that need to be heeded by the airlines. The turmoil in the world Economic on Air Transport Management starting with the financial crisis in to the current sluggish growth in is well known and has presented many challenges for governments and companies on a global scale. Additionally, there have been number of other significant occurrences in the global environment, like the terror attacks in Europe and conflict in Syria, that have had a defined effect on the global economy. Clearly these issues will also have an impact Trwnsport the air transport industry. It is therefore logical to outline key issues in the macro-environment to highlight some of the events that have affected the air transport industry. In reading the forecast figures given throughout this section, it is important to note that the click at this page economic situation is extremely fluid, with changes appearing on a daily basis Economic on Air Transport Management affect the forecasts made by the various economic agencies like the International Monetary Fund IMFthe Organisation for Economic Co-operation and Managekent OECDand the World Bank.

The forecast figures used are those available at the time of writing and do not reflect any subsequent adjustments. Gross Domestic Product. The key focus of the section however, is on the South African economy, with specific reference to overall GDP growth and growth within the various sectors of the economy.

This macro discussion on GDP Transpport to provide greater context for the discussion on the contribution of aviation to global and South African GDP see sections 2. This financial crisis at the end of evolved into a global recession inwhich persisted to the latter part of The speed of recovery from this recession has been very slow when compared to previous recessions.

InRowe stated that this slower rate of recovery is not surprising because recessions that arise out of a financial crisis are deeper and the recovery from them takes longer than the recovery from recessions The of Rosh Hashanah were not caused by financial collapse. A visual inspection of the line plots represented in figure 4. The key difference is the depth of the downturns and the height of the upswings. From figure 4. The figure also clearly highlights the slow pace of recovery with only slightly increased growth rates being forecast to Economic on Air Transport Management What is noticeable is that shortly Econpmic the — recession there was a period between and where an extremely high Economic on Air Transport Management of GDP growth was experienced on a global scale.

Exchange rate fluctuations are influenced by a number of factors and Trannsport a significant influence on the commercial air transport industry. Many of the costs within the air transport industry, especially jet fuel and aircraft purchasing, are denominated in US dollars because it is a global industry with many global suppliers throughout the value chain. Fluctuating currencies can mean that a decrease in a cost fuel for examplecan be negated by a weakening against the US Dollar Carlson Wagonlit Travel, With reference to figure 4. Noticeable is how the US Dollar and Euro exchange rates against the Rand drew closer together whilst the British Pound rate grew further apart.

It is only in the last few months of that the differences between the exchange rates between the Rand and the three currencies grew smaller. The Rand experienced significant volatility against the three currencies at about August and this continued to the latter part of The currency then strengthened until another sharp decline in April Whilst the overall trend for was a downward one, there is still significant volatility in the exchange rate which reflects a large number of events and turmoil Mamagement in the South African and global economy.]