By: admin On: July 17, 2017 In: Travel agency & Tour Comments: 0

In 2010, things  are expected to look a lot brighter  for the airline industry buffeted by one of the severest economic  recessions in 2008-2009. To cope,  in the past year, airlines  have been  forced to respond  by cutting  back on flights, rescheduling existing routes and searching for new revenue streams such as charging for aisle seats and baggage.  Some have also turned to business process outsourcing and outsource travel services.

According to IATA, the first green shoots  of recovery are likely to be evident  in 2010; passenger traffic is likely to reach  the peak levels of 2007 even as airlines  drive down non-fuel  unit costs  by 1.3  percent. As a result, there  is likely to be a tempered optimism  in the airline industry in 2010.

There are some key themes emerging  in the ‘flight path’ of 2010

1. Increasing travel demand: Two of the top six U.S. airlines  saw their best  traffic results  in 18  months this past  November.  While Southwest recorded  a 12 percent increase, Continental registered a 2.8  percent increase, respectively,  in miles flown per passenger. These figures represent absolute increases in ‘warm bodies’ flown – a more reliable  metric  than passenger load factor.

Clearly, the slump  in air travel is ending.  IATA has now revised its passenger traffic estimates for 2010 upwards  by 4.5  percent (as against  the previous forecast  of 3.2  percent in September 2009). An estimated 2.28 billion people  are expected to fly in 2010, bringing the total passenger numbers back in line with the peak recorded  in 2007.

2.Airline-supplier consolidation: As airlines  improve services  while implementing aggressive  pricing strategies, many plan to forge new links with distributors, including  travel management agencies that don’t rely on the traditional GDS connections. A trend that  first started two years ago, airlines  are expected to continue to implement direct-connect models  to manage  products and inventories, and establish closer ties with their customers. For example,  last October, American Airlines indicated its plans  to move all indirect  volume to direct  connections.

This will change  the nature  of Airline-GDS relationships. One notable  potential by-product  of this trend  could be GDS / TMC consolidation. With Amadeus and Travelport considering IPOs, the cash raised  could be used  to purchase a major global TMC. The GDS would like to have a more direct impact  on their revenue  potential from the carriers  and,  if this were to occur, a whole new dynamic  will impact  the already convoluted  distribution model.

3.Environmentally-responsible aviation: By March 2010, EU-based  airlines  must  provide carbon dioxide emission  reports.  That’s why, over the last six months, several EU airlines  have begun  using bio-fuel either wholly or in part on certain  routes. This trend  is now spreading to North America where several airlines  have indicated their interest in buying eco-friendly jet fuel. In addition, several EU airlines  have begun  developing carbon  offset programs as well as implementing shorter routes  and efficient  landing  operations as well as best practices in fuel management to reduce emissions.

Read More at http://bit.ly/9oINsh

Source by WNS Global Services

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