Today, more than 1,000 scheduled airlines operating more than 15,000 commercial aircraft carry nearly 2 billion passengers and more than 20 million tonnes of cargo annually, about 40% of the world’s manufacturing exports based upon value. If the industry were a nation, it would rank seventh in the world in aggregate economic output. By shrinking the planet, aviation has been responsible for bringing closer together disparate economies and cultures, stimulating economic growth and promoting social and cultural exchange, in an increasingly interdependent global environment. In catering to the needs of a global economy and increasingly mobile populations, players in the industry face numerous challenges.
But the challenges they are facing are unlike those facing any other industry. In particular, the current economic climate, financial chaos of some airlines, and increasingly competitive environment are heightening the need for a radical restructuring of the air transport industry.
The general consensus is that industry consolidation will be inevitable. Traditional carriers will transform themselves from being national companies with international operators to becoming truly globally focused enterprises. Some experts believe, for example, that in Europe there may be only four to five major players in three to five years’ time.
These trends are fuelling the need for regulatory changes, most significantly, the ambition to develop a liberalizing agreement between the European Union and United States. The negotiations between the U.S. Department of Transportation and the European Commission, which started in December 2003, are paving the way for the creation of a single aviation market between the EU and the U.S.
These complex challenges and changes to the industry require the very best of professional services providers. At Deloitte, we constantly challenge ourselves to improve services to our clients in the aviation and transportation industries.