ALTA and ICF SH&E bring you the First Quarter 2014 Briefing on Aviation Industry Insights

Country Focus: Peru
Air travel demand is highly correlated to economic growth. From 2007 to 2012, Peru’s GDP grew at an average rate of 6.5% per year, faster than all other Latin American countries except Panama. High demand in Asian countries for Peru’s vast mineral resources has driven the country’s economic success in recent years. However, abundant natural resources alone do not offer sustainable growth, as evidenced by Peru’s neighbors such as Argentina and Brazil. Peru has also benefited from macroeconomic discipline and a commitment to open markets – factors that provide stability to the economy and encourage investment.

The Evolving Alliance Model and Implications for Airlines
The partnership and alliance options available to airlines today are becoming more numerous and complex, ranging from simple cooperation on interline agreements and frequent flyer programs, to immunized joint ventures and equity-driven ventures. Airlines can dramatically increase their competitive advantage by partnering with other carriers or groupings – or watch as competitors conclude increasingly far-reaching and more powerful cooperative agreements.

Airbus A319-100 Appraisal
The second smallest member of the highly successful Airbus A320 family, the A319-100 current engine option (“ceo”), entered service with Swissair in 1996. As of September 2013 there were 1,306 in commercial service and an additional 93 on order (excluding the Airbus Corporate Jet ACJ319 in all instances). Positioned in the 125-seat market segment, the A319-100 faces competition principally from the in-production 737-700 (1,073 in active service/197 on order) as well as from products under development such as the Bombardier CSeries, Boeing 737 MAX 7, and A319neo (“new engine option”).

The Great Wildcard – What Lower Fuel Costs Could Mean for Aviation
The most fundamental change which has shaped the aviation industry in recent years is the inexorable rise in the price of fuel. A decade ago, the world’s airlines spent some $44B on aviation fuel, accounting for 14% of operating costs. Today, the collective fuel tab is $211B and a whopping 31% of operating costs. Most industry executives assume that oil prices will remain at or around $100/bbl. for years to come – a driving force behind the record backlog for new fuel efficient aircraft.

The March of LCC´s Across Borders
It’s no secret that Low Cost Carriers (LCCs) have staked a permanent claim to roughly a third of the U.S. domestic market and to an even higher percentage in Canada and Mexico. After successes in domestic markets the LCCs turned to trans-border growth and a review of what the LCCs have achieved in those is discussed here.

More:
http://www.alta.aero/aura/content/IndustryInsights/ALTA_Industry_Insights_1Q_2014_EN.pdf