Question

What are the 5 global drivers of aircraft industry? could you explain how they are changing the landscape of the industry?

Answer 1

• The 5 global drivers of aircraft industry are:Revenue,Demand,capacity,Costs,Yields.
  • Revenue:The stronger revenue is creating an offset to accelerating costs. The passenger's and shipper's demand is said to increase above the trend,which is turns the pricing positive. Overall revenues may rise to USD834 billion, which is 10.7% from USD754 billion in 2017.
  • Demand: The passengers' demand is said to rise by 7.0% in 2018 , down from 8.1% in 2017. Due to the economic growth,there is an increase in demand.
  • Capacity:The passenger load factor is said to be 81.7%,which is an increase of 0.2%. The total passenger number is said to increase by 4360 million,which is an increase of 6.5%.
  • Costs:At the last stage of economic cycle,there is an emerge of inflation. Airlines are particularly facing pressures due to increase in fuel and labor cost. The average cost of Brent Crude is decided to be USD70/barrel for a full year. This is an increase from USD54.9/barrel in 2017 .
  • Yield:The yield of passenger's are expected to increase by 7.0% in 2019,which is after 0.8% decline in 2018.