By David Pflieger
Over the past three decades, global air travel has grown by an average of about 5 percent a year. While changing economic conditions have affected air travel at various times, the overall trend has been marked by steady growth. Today, there are more than 3,700 airports, 2000 airlines, and more than 23,000 planes in service across the globe.
Industry watchers believe the total value of the global airline industry will top $713 billion in the coming year. This represents a spike of more than 42 percent from 2010. By 2015, the number of passengers will likely exceed 3 billion travelers, up some 28 percent from 2010.
Fuel costs continue to present a challenge to profitability in the years ahead. In 2001, for example, fuel accounted for 13 percent of airline costs. A decade later, that figure had risen to 30 percent of costs. This rise in prices has already spurred a search for more cost-effective, environmentally friendly fuels.
About David Pflieger: A decorated former United States Air Force pilot, David Pflieger currently serves as Managing Director and CEO of Air Pacific, Ltd., the national air carrier of Fiji.
Despite an uncertain economy, North American airline companies are expected to post improved growth for 2012, according to the International Air Transport Association. Increased travel demand and tighter capacity are contributing to higher profits this year. Profits should hit $1.4 billion in 2012, up from the previously projected growth of $900 million.
In the Asia-Pacific market, carriers will bring in record profits in 2012. Industry watchers predict profits in this market of $2 billion, slightly down from projections, but still strong.
Overall, airlines are abandoning older, less-efficient aircraft and focusing on rightsizing their fleets. Investment in new aircraft over the next two decades could total $3.5 trillion toward the purchase of nearly 28,000 aircraft, each with seating capacity for more than 100 passengers. Asia will continue to drive the increased global demand for travel.
About David Pflieger: During his tenure as Senior Vice President of Virgin America, David Pflieger led the airline from start-up status to its receiving recognition as Best Domestic Airline from Condé Nast and Travel & Leisure for 2008, 2009, and 2010. Mr. Pflieger is currently the CEO & Managing Director of Air Pacific Ltd.
By David Pflieger
From start-up to stardom, Virgin America recently grabbed the number-seven spot for innovation in an AirlineTrends.com ranking of airlines. Describing Virgin America as a “no-frills-chic” carrier, the website praised the airline for its forward-looking approach to airline travel.
Some of the airline’s innovations included iconic cabin lighting, power and USB outlets in all seats, and in-flight Wi-Fi on all aircraft. These perks have helped to establish Virgin America as the preferred choice among young, urban, tech-savvy air travelers. Some industry watchers refer to the carrier as the “unofficial airline of Silicon Valley.”
From its hub in San Francisco, Virgin America currently flies to 17 cities and has plans to expand to more than 30 cities in the next five years. The fleet has also grown in recent years, from 34 aircraft in January 2011 to 51 aircraft in mid-2012. The company plans to nearly double the fleet to 111 aircraft by the end of the decade.
About David Pflieger: A decorated United States Air Force officer, David Pflieger enjoys a reputation as a respected airline industry executive. His accomplishments include serving as a key member of the start-up teams for two award-winning airlines, Virgin America and Delta Song.
As the global airline industry embraces sustainability, executives are calling on the United States government to increase efforts to promote biofuels, according to a report on SapphireEnergy.com.
Anticipating a huge spike in passenger traffic in the next 15 years, the executives seek to meet the demand without increasing carbon emissions.
Fuel currently represents between 30 percent and 45 percent of operational costs. The airline industry consumes about 65 billion gallons of fuel annually. Some industry officials are calling for biofuels to account for 50 percent of fuel by 2040. They want the transition to be transparent, with newer planes coming off the line capable of running on biofuel.
Industry executives say that a stronger government commitment to the development of economically viable biofuel will help ensure the transition takes place.
About the Author: An experienced airline industry executive, David Pflieger was Senior Vice President of Virgin America from 2006 to 2010. During his tenure, Mr. Pflieger oversaw the growth of the company from a start-up venture with just 14 people to an award-winning airline with more than 1,300 employees. Today, Mr. Pflieger serves as CEO and Managing Director of Air Pacific Ltd.