We are about two-thirds into 2015 and thought it would be interesting to follow-up on a blog post published at the beginning of this year: Aviation Industry Trends, Predictions & Advice for 2015. The original blog post written by our President, Michael Rooksby, listed some aviation industry trends, predictions, and advice for 2015 as given by experts in the industry.
This week, I sat down with Michael to discuss how the expert predictions were panning out so far and to get a better understanding of his own thoughts and insights into the aviation industry. Here’s the dialogue from our Question and Answer session:
Question & Answer Session
VT: “Michael, I’d like to revisit the Aviation Industry Trends, Predictions, & Advice for 2015 blog post you published at the beginning of this year. The first part of your blog talks about the current state of the aviation industry. Do you think the industry has changed much since you first wrote the blog?”
MR: “I think the industry is still in a rather difficult environment and not much has changed since the beginning of the year. We see airlines posting strong revenue numbers to help compensate for the slim margins.”
VT: “How do you think 2015 is shaping up according to the expert predictions made at the beginning of this year?”
MR: “It looks like the experts are a little off the mark on some predictions. For example, North America to South America air freight volumes declined about 7% per month year over year from January through April. Europe’s top three cargo hubs - Frankfurt, Paris, and Amsterdam, all reported average volume declines of 2.8% through June of 2015. Asia-Pacific carriers faired a little better with a year over year decline of 0.3%.”
VT: “Of all the expert predictions for 2015 and what you have observed in the industry, which ones seem to be ringing true the most?”
MR: “There have been some activities that are very consistent with the predictions. We see FedEx purchasing new planes to continue the modernization of its fleet. This aligns with the reducing costs and operational efficiencies. In addition, several strategic acquisitions are helping position FedEx to better meet increasing customer expectations.”
VT: “Okay. So are there any prominent trends you see right now that weren’t mentioned in the original blog post?”
MR: “I think the weaker than expected global economic growth and low business confidence in 2015 has been a real problem for the aviation industry especially with air freight. Most recently the slowdown in the Chinese economy has everyone a little worried. The Eurozone has had poor business confidence for some time and is struggling with concerns about a Greek exit from the Euro. Sanctions against Russia, Iran, and other countries contribute to lower volumes as perceived demand dries up. I think demand will remain stagnant until governments find a way to stabilize growth and remove sanctions and barriers that inhibit trade.”
VT: “In terms of security training and compliance, what advice can you offer the aviation industry based on these trends?”
MR: “Well, as we know, the aviation industry is shackled by the ebb and flow of demand. If demand is high, we need to add capacity. If demand is low, we need to remove capacity. I think the same model holds true when thinking about security training. The framework needs to be flexible and adaptive to handle increases and decreases in demand. Organizations need to be able to quickly add capacity, which means additional training and man power. Having a training framework that allows for easy expansion or contraction is vital.”
What are your thoughts on how 2015 industry predictions are panning out? Let us know what you think below.