INGLOBAL AEROSPACE STUDY FINDS FUEL COSTS DRIVING AIRLINE EXECUTIVE DECISIONS

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By TESTCustomwebLP TESTCustomwebLP January 25, 2011 15:09

INGLOBAL AEROSPACE STUDY FINDS FUEL COSTS DRIVING AIRLINE EXECUTIVE DECISIONS

A report from CIT group has shown that although airline executives continue to express concern about rising fuel costs, many continue to take a wait-and-see approach towards new aircraft technology. The “2011 Global Aerospace Outlook — Challenges of an Ever-Changing Industry” research report, gathered the views of more than 130 senior airline executives from around the world with fleets of 25 or more jet aircraft. The survey took place during November and December 2010.

“Faced with fierce competition and steep fuel prices, airline executives are taking a close look at how they operate,” said C. Jeffrey Knittel, President of Transportation Finance at CIT. “In response, airlines are optimizing their fleets, looking for cost savings, exploring new forms of revenue growth, considering mergers and strategic alliances, and focusing on the business traveler.”

According to the findings, airline executives said their leading challenge over the next two years is increased fuel costs owing to rising global fuel demand (53%), as well as increased competition from different (38%) and similar (27%) types of airlines. In fact, 82% of respondents said they were extremely concerned (51%) or very concerned (31%) about fuel supply and costs. However, even with growing demand for increased fuel efficiency, nearly two-thirds of airline executives (68%) said they will take time to see how the next-generation of more fuel-efficient aircraft performs rather than be one of the first to acquire the new models.

Additional key findings from the report expect increased M&A activity, the dominance of leasing as the most important form of financing, the emerging markets promise the greatest opportunity for growth, and business travellers remain the main source for revenue growth. Regulatory uncertainty is also creating anxiety among respondents.

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By TESTCustomwebLP TESTCustomwebLP January 25, 2011 15:09
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