Analysis of Airline Industry

Executive Summary

Today, it is difficult to imagine a world without air travel. Aviation has fundamentally evolved from being a luxury to being an essential means of transport that connects towns, cities, countries and cultures. The number of people travelling on airlines to and from and within Australia has grown from 2.3 million in 1958 to 69.5 million in 2007, a rate of growth14 times that of population growth. The long-term growth predictions pose a fundamental challenge for government and industry. Some of our major airports already operate at close to capacity during peak times; pilots, engineers and air traffic controllers are in short supply; aviation safety standards are becoming a focus of community attention; flight delays and cancellations have become more frequent; communities are increasingly concerned about the impact of aircraft noise; and aircraft account for a growing proportion of global greenhouse gas emissions (Brueckner, 2008). Addressing these challenges will not be simple and the solutions will not be immediate. Effective planning in the aviation industry takes time. Investment in aviation infrastructure requires consideration of complex commercial, engineering, environmental and safety factors. Similarly, setting the groundwork for adequate aircraft fleet and workforce planning requires the industry to take a long-term view.

Analysis of Airline Industry

Proposal

Australia's aviation industry is essential to the development of the nation's economy. We depend on it to connect to each other and to the rest of the world. Whether moving tourists, families, freight or business people the industry is critical to Australia's ongoing economic and social development. Australia's modern aviation industry supports nearly 50,000 jobs - many of them in highly-skilled specialties - as well as contributing $6.4 billion each year to Australia's economy. Aviation activity has grown strongly over the last twenty years. This has largely been driven by broader economic growth, increased tourism, regulatory reform, and greater industry efficiency. More people than ever before are flying to a greater number of destinations on planes that are bigger, quieter and more fuel-efficient (Daniel, 1995).

Examining Knowledge Management Capability in Aviation

Objectives

Today's industry also faces a number of global challenges. The world economy is changing rapidly and has become increasingly unpredictable as a result of the global financial crisis. Economic conditions are affecting many international industries and demand for aviation services is volatile. Airlines are continuing to make significant capital investment in new aircraft which will need to be matched by appropriate investment in airport infrastructure and air traffic management systems (Mayer, 2003).

The International Air Transport Association (IATA) has reported that the aviation industry made a profit of $5.6 billion in 2007, the industry's first profit since 2000. However, record high fuel prices and slowing traffic growth were expected to result in industry losses of $5.2 billion in 2008. Since that prediction, demand has slowed in response to the global financial crisis and, although oil prices have fallen, airline financial losses may be even greater than those forecasts. Such losses are unsustainable and will drive structural change within the international aviation ...