Question

Discuss how aviation companies can increase its profitability. Identify the shortrun
and long-run strategies. Provide numerical support, if possible. Be
as specific as possible.

You may want to write the report as a government officer advising the
Minister, a chief strategist in a corporation, a consultant advising a
client, or an entrepreneur exploring investment opportunities, etc.

Answer 1

Aviation companies can increase their profitability by opting for higher cargo transport share as opposed to passenger transport as less number of people will fly henceforth because of the virus.

In the short run it could increase the marginal benefit of per square foot of cargo being transported by opting for full occupancy and certain cargo products of industries which are highly valued and of high margin.

In the long run, it could increase the number of aircrafts which can transport a mix of cargo and humans, so that they are able to leverage on that benefit and increase occupancy rates with lower human transport, easy convertibility and access.

As a government officer advising the minister, the aviation sector could be revived by increasing their share in the supply chain mechanism and enhancing fast trade possibilities, both domestically and globally. With low fuel costs, this will add as a major incentive to enhance supply chain capabilities and improve the overall trade access to goods and services with the help of the aviation sector.