Sunday, 22 January 2012

What Keep Airline CROs Awake At Night


Government regulations on airport security, emissions and taxes are a key issue negatively impacting global airlines’ revenues over the next 18 months, according to a bi-annual Sabre Airline Solutions survey of executives at nearly 80 regional and global airlines worldwide who were asked to rank what positively and negatively impacts airline revenue. 
  
This is the first time that government regulations has ranked in the top three challenges that will negatively impact an airline’s business revenues. The top three negative issues are, in order, fuel prices (81 per cent), government regulations (72 per cent) and airport/passenger security (59 per cent).

Some 43 per cent of Asia Pacific airlines who took part in the survey identified government regulations a key challenge their airline will face over the next 18 months.

Many airlines from around the world are opposed to the recently launched EU Emissions Trading Scheme (ETS), which requires airlines flying into European airspace to pay for carbon emissions. 

A number of airlines worldwide have also faced a string of proposed or new airline taxes which threaten to increase the cost of air travel considerably, depressing travel demand in an already unstable economic environment. 
  
“Airlines already invest significantly to reduce their carbon emissions, so rather than imposing one-off taxes and compliance schemes that hamper this investment, governments would be better placed having more sustainable policies, such as incentives for the research and development of alternative fuels, and adopting policies around NextGen air traffic control,” said Sam Gilliland, chairman and CEO of Sabre.   

 On the flipside, the areas having the greatest positive impact on airline revenues are, in order, revenue/yield (81 per cent), customer loyalty and retention (81 per cent) and IT investment (76 per cent).

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