Question

Infrastructure challenges proved the most important issue for air transport development, but investment in projects were said to vary across the globe, such as in China where money is being pumped into developing infrastructure, but it is less in other regions, while whether passengers shoulder the cost of improvements also came under the microscope. Profitability battles in aviation was also high on the agenda. We are in a period of sustained growth in volume, but not necessarily profitability. These include airports, and air navigation services, who do not make a profit and do not cover their long-term capital costs. How air transport managers should react on this issue?

Answer 1

According to my opinion Air transport manager is well aware of aviation industry that incurred Fixed cost in very much. from development of airport, runway, terminal building and aircraft it self incurs long term fixed cost that is recover over a long period of time. along with this infrastructure development is also important consideration. regular repair and maintenance of aircraft and other related facility incur the cost in volume. we can not ignore them. while you shoulder the responsibility to  passengers for improvements.

We also consider that profitability comes in high volume but we can not continue the same profitability for long time. We are in a period of sustained growth in volume, but not necessarily profitability. as we are bearing the fixed cost of maintaining the same facilities but profitability comes from these services go to maintaining these services so we can not predict high net profit from these services and would remain in low profitability. along with this remittance of claim and remuneration to employees incur also fixed cost so we can maintain the sustained growth but we can not think of long term recovering of cost and profitability.