The Future of Aviation

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Despite the global economic slump or downturn that has affected almost every other sector, and despite the fluctuating oil prices, the future of aviation looks bright and hopeful enough in these times of gloom. The global aviation industry is witnessing a healthy and continued growth throughout the past few years thanks to positive economic factors like lower fares, wide availability of low cost tickets, growth in consumer spending, higher disposable incomes, corporate expansion and profitability, better industrial performance and high GDP growth.

Because of the global economic downturn, the costly airlines with expensive tickets are finding it difficult to stay afloat and attract fliers for there are few takers for such frills now, and it is because of the very same reason that low cost carriers, both domestic and international, are having a field time. Almost every other day, low cost airlines companies are mushrooming in large numbers in every country and those who have to fly regularly are making a beeline for these no frills low cost affordable airliners.

All over the world, domestic aviation sector/market has grown by 50% almost during 2006 and while full service carriers have been forced to shed their loads and market share by at least 1.5% every month, the low cost carriers are picking up that very load and increasing their turnover profit by leaps and bounds.

In 2006, 29.6% was the year on year total increase of aircrafts movement in the world and in countries like India, where the economy is developing rapidly and the average salaries of the middle class people are rising, the current rate of growth in the aviation sector is 25%, which is undoubtedly the highest all over the world.

Industry experts are of the belief that till 2010, the annual compounded rate of growth in the aviation industry will be 25% and of this, the highest growth, amounting to almost 80% will be seen in the low cost carrier segment, better known as LCC. LCC had captured 61% of the market share in 2005. In 2008, that had ballooned into 65% of the online direct air ticket market.

However, one thing that can affect the future of aviation is the fluctuating oil or fuel prices since 50 to 60% of the price of the ticket goes towards fuel costs. The governments of the various countries have to reduce taxes and duties, and air surcharge, fuel surcharge and various other such government revenue earners, when jet aviation fuel prices rise up, to minimize the fares and attract the fliers and keep the low cost aviation industries booming.

Without this little bit of vital governmental interference, the aviation industry might become bankrupt, so the governments of all the countries have to bail out the aviation sector at times for their own benefit.