Changes in Airline Industry during 2006 - 2011

Having analysed all these facts and figures we can see that the Airline industry is an ever changing business environment, facing changes and challenges from many sources. The global business environment reached its lowest point during the recession in 2009, despite this the world exports increased by 14.5% in 2010 which is the largest annual number in 60 years (WTO, 2011). This sharp rise renewed the world trade to the levels it was before the recession (WTO, 2011). The global business environment is facing the uncertainty of financial stability. During 2009 some airlines went into administration due to the fact that they were unable to improve their efficiency and profits, for example, Flyglobespan (KeyNote, 2010). However, the recovery of the global economy is not seen only as a positive in the industry this is due to the fact that the oil prices will increase which then will increase operational costs. A major risk that could have a negative impact on the industry is the carbon emission tax which was signed by European court of justice meaning that any airline flying to or from Europe starting from the 1 January 2012 will need to buy carbon permits (Reuters, 2011). Furthermore, the uncontrollable and unfavourable weather conditions are another major issue that affects industry and creates unwanted expenses. One of the greatest opportunities for low-cost airlines is the opportunity to open new routes and obtain more passengers; in addition to this technical advances in aircraft manufacturing and up-keeping should allow further reductions in costs. …