Financially speaking, 2015 was a great year for our industry. Low oil prices meant that airline profits were up – if unequally distributed. In June, IATA announced a projected $29.3 billion net profit – up an astounding 80% from 2014, and in April of this year, IATA announced global passenger traffic results for February 2016 “showing continuing strong demand growth for domestic and international travel.”
For an industry long plagued by net losses, the news is welcome, especially for US carriers, who have been enjoying the lion’s share of that profit. As Bloomberg noted when the announcement was made in June, US profits are almost double their European and Asian counterparts. And with oil prices only slowly starting to rebound, the forecast is looking good for the remainder of 2016.
Still, it’s hard for many to believe that the profit margin is so slim in the aviation industry, with airlines earning an average of just $8.27 per passenger – even with record-low oil prices.
The reason for the meagre margin is complex: stiff competition from rivals, the lack of competition among suppliers and the industry’s vulnerability to outside “shocks” (everything from pandemics to the price of oil) all contribute. Faced with the reality of a 4% net profit margin – in a good year – airlines have been getting creative about finding ways to pack more passengers into planes – whether that means making the lavatories smaller (hard to imagine how that’s even possible) or promoting (threatening?) the idea of “vertical seating” (got to love that phrase).
But getting a bigger piece of that $29 billion pie doesn’t have to mean materializing more seats out of thin air. It can simply mean doing what you already do, just better.
That’s where we come in.
Every time we help you avoid an AOG situation through our Rapid Exchange (RX) program, you protect your margin. You avoid the hard costs of a grounded plane and the soft costs to your brand – never something to be underestimated in this age of viral Tweets, online reviews and Facebook posts. Lets face it, when your engine FADEC is unserviceable and you are nil stock, the last thing you want to do is buy an additional unit that you don’t really need (for $295,000 USD) when all you need is to buy time. Same goes for pumps, valves, landing gear, avionics, and practically every other part that goes on most commercial aircraft – items Airstart stocks 7/24.
With a trusted MRO partner by your side, you can keep your aircraft – and your profits – trending skyward. No matter where you are, we’re only a call away.
Wishing you all a great spring–summer flying season, and we hope to see you at the various conferences coming up.
Looking forward to seeing you on the road – and in the Skies!