While it may have taken the global economic recession a full year to deprive the airline industry of USD 11 billion, it took a spewing volcano just six days to relieve the industry of USD1.8 billion.
The lifting of the flight ban, controversial, politically divisive and arguably hasty though it may have been, obviously came as an immense relief to everyone and restored an illusion of control. It is armed only with this illusion that we must now answer the very difficult question – what are the short and long term impacts of this unforeseeable situation and how does one prepare for the unknowable?
Unless the aviation industry can better adapt to change, unknowable situations like terrorist attacks, crew strikes, virus outbreaks, recession, spiking fuel costs, and even as we see, acts of nature will continue to wreak havoc on the global economy. “In terms of air traffic management, the highly bureaucratic system was put on display when it took five days for any reaction by European states,” notes Frost & Sullivan’s Commercial Aviation Consulting Analyst, Max Sukkhasantikul. “Unfortunately, most airlines are considered a national asset, bringing politics into play, particularly in the procurement of aircraft and selection of routes. Until this mentality changes, aviation will still continue to suffer. “On the surface, most of Europe may be a borderless continent, but the sky has not changed much since WWII.”
Moreover, airlines in terms of internal management, still operate in a legacy system, in which staff are unwilling to adapt to change as well, which has led to so many cabin crew and pilot strikes in Europe.
“It may take up to three years for the industry to recover fully and some airlines may not make it without government help,” says Sukkhasantikul. Whilst major airlines can absorb the impact on their financials, the smaller and less established carriers will suffer most if they do not have extended borrowing facilities or cash reserves. “Those that do, like Ryanair, should be fine. Lufthansa and Air France-KLM have the upper hand as they have shares – 23.1 per cent and 11.6 per cent respectively – in the multi-billion dollar, global airline distribution company, Amadeus. Approximately half of these shares were announced to be sold by year end, a financial buffer from this crisis of several hundred million dollars. However, airlines like Scandinavian Airlines (SAS) will have difficulties accounting their impact of over US$200 million, at a time when they were at the verge of bankruptcy prior to the volcano eruption. As for British Airways, already reeling from cabin crew strikes, a pension deficit of almost GBP 4 billion, the outbreak of H1N1 virus, and last years’ financial losses, they will have yet another storm to ride out, once this ash clears.”
At least we can find comfort in the fact that the grounding of over 100,000 flights over 6 days has saved 200,000 tonnes of carbon emissions. However, this occasion has proved to the world that aviation cannot be taken for granted, and its growth should not be curbed. “It is a shame that it takes such unfortunate events for people to realise that aviation is, and always has been, an important contributor to the world’s economy,” notes Sukkhasantikul. “On this occasion it has affected up to 8 per cent of global trade.”
For more information, or if you would like to speak directly with Max Sukkhasantikul, please contact Katja Feick, Corporate Communications, at firstname.lastname@example.org.Contact:
Katja Feick | Frost & Sullivan
Amputees can learn to control a robotic arm with their minds
28.11.2017 | University of Chicago Medical Center
The importance of biodiversity in forests could increase due to climate change
17.11.2017 | Deutsches Zentrum für integrative Biodiversitätsforschung (iDiv) Halle-Jena-Leipzig
DNA molecules that follow specific instructions could offer more precise molecular control of synthetic chemical systems, a discovery that opens the door for engineers to create molecular machines with new and complex behaviors.
Researchers have created chemical amplifiers and a chemical oscillator using a systematic method that has the potential to embed sophisticated circuit...
MPQ scientists achieve long storage times for photonic quantum bits which break the lower bound for direct teleportation in a global quantum network.
Concerning the development of quantum memories for the realization of global quantum networks, scientists of the Quantum Dynamics Division led by Professor...
Researchers have developed a water cloaking concept based on electromagnetic forces that could eliminate an object's wake, greatly reducing its drag while...
Tiny pores at a cell's entryway act as miniature bouncers, letting in some electrically charged atoms--ions--but blocking others. Operating as exquisitely sensitive filters, these "ion channels" play a critical role in biological functions such as muscle contraction and the firing of brain cells.
To rapidly transport the right ions through the cell membrane, the tiny channels rely on a complex interplay between the ions and surrounding molecules,...
The miniaturization of the current technology of storage media is hindered by fundamental limits of quantum mechanics. A new approach consists in using so-called spin-crossover molecules as the smallest possible storage unit. Similar to normal hard drives, these special molecules can save information via their magnetic state. A research team from Kiel University has now managed to successfully place a new class of spin-crossover molecules onto a surface and to improve the molecule’s storage capacity. The storage density of conventional hard drives could therefore theoretically be increased by more than one hundred fold. The study has been published in the scientific journal Nano Letters.
Over the past few years, the building blocks of storage media have gotten ever smaller. But further miniaturization of the current technology is hindered by...
11.12.2017 | Event News
08.12.2017 | Event News
07.12.2017 | Event News
15.12.2017 | Power and Electrical Engineering
15.12.2017 | Materials Sciences
15.12.2017 | Life Sciences