The tourism, hospitality and leisure industry finds itself at the forefront of unprecedented challenges. Our latest report looks at some of the changing trends in the industry, including an assessment of the impact of pandemics and the measures businesses are taking to manage their potential exposure.
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Aviation & Transport Services
Take to the skies
Companies from all transport sectors are facing significant challenges arising from the global ‘credit crunch’ and its impact on business and consumer confidence alike. The challenges posed by the current economic climate, tougher competitive environment and regulatory changes require the very best professional service providers dedicated to helping these companies succeed. We already advise many of the industry’s key players on the significant issues it faces.
All of the UK’s leading aviation and transport companies – including both major UK airport operators and the majority of the UK’s biggest airlines – choose Deloitte as a provider of professional services. We are the number one professional services firm globally for aviation and transport clients, providing a broad range of services to companies across the aviation sector, including airlines, airports, ground handlers, air traffic controllers and Civil Aviation Authorities.
Research & insight
Issues, trends & soulutions
- Mergers, acquisitions and disposals
Whilst most other industries have shown an abrupt halt to the number of mergers and acquisitions taking place, the desperate need for most airlines to reduce their cost base and achieve synergies with competitor airlines continues unabated. With the next phase of the Open Skies agreement scheduled for 2010, the opportunity for EU and US airlines to acquire each other may finally be allowed. Many businesses are also revising their strategies to focus on their core business and therefore dispose of their peripheral businesses, such as frequent flier programmes, engineering departments and ground handling capabilities. Deloitte are already engaged with a number of airlines to assist them in their proposed transactions and have experience of post integration management through a number of high profile mergers in the sector in recent years. Find out more about our Corporate Finance team. - Hedging strategy
To hedge or not to hedge, that is the question. Both fuel prices and currencies have fluctuated wildly as a result of the turmoil in global markets and, with cost management becoming increasingly important to airlines in terms of managing their cost base, effective hedging enables management to plan ahead. Deloitte have advised a number of airlines on their hedging arrangements and our tax team have a range of schemes that can improve a business’ pre-tax profit through effective foreign exchange management. - Cost reduction
The aviation sector, now that it is seeing a decline in revenues, especially as people are largely not choosing to fly at the front of the aircraft, needs to focus on cost reduction methodologies and related solutions. To this end Deloitte has identified a new product line which encompasses a powerful analytical tool for critically analysing an airline’s cost base and related working practices. This analytical tool is able to look at the efficiency of fuel burn by aircraft/ aircraft weight characteristics/ pilot practices at airports, pilot and crew rostering, the impact of minimising taxiing and delays in landing and taking off etc to assist management in focusing their attention where real costs can be saved. Staff costs are another area where Deloitte can assist businesses to make savings, such as salary sacrifices and SMART pensions, whilst Deloitte Consulting are able to assist in more fundamental reviews of staffing and ways to reduce the cost burden.
Our clients
Deloitte in the Aviation & Transport Services sector:
- We serve 9 of the world’s top 10 passenger airlines (encompassing 85% of all passengers carried in the UK) and 15 of the top 20.
- We provide audit and/or other services to 7 of the 10 oneworld members, 12 of the 17 in Star Alliance and 8 of the 9 in SkyTeam.
- We sit as a Strategic Partner on many of IATA’s committees, including Tax and FinCom;
- We work closely with the IAAIA (International Association of Airline Internal Auditors);
- We serve 91% of the Aviation & Transport companies included in the Fortune Global 500.