MarketLine Blog

Posts about Aviation

Alitalia staff vote down latest cost cutting plan: Financial difficulties making the future of the company look increasingly uncertain

MarketLine

Alitalia has for many years now been a company incurring consecutive losses year after year. Historically the Italian government has stepped in during times of extreme financial difficulties to bail out the country’s flag carrier. However in 2014 it agreed to sell a 49% stake in the company to UAE based Etihad Airways, which subsequently invested significant resources into Alitalia in order to turn it into a profit making company. Disappointing results nevertheless have continued and Etihad’s attempts to get the company to reduce costs by lowering wages and reducing… Read more

Airline Industry: Heading to value differentiation

MarketLine

Price differentiation of an airline company has been implemented so far on the means of absorbing the consumers’ willingness to pay for the same service, an economy class with frills. In this way, not much price differentiation existed on the value of services as the distinction made was only between economy and business class. This distinction of services was too steep to keep out many consumers that would be available to pay for the price of a ticket with no frills and lower quality of services. The surging penetration of… Read more

Iran Transport: Accelerating forward to the future

MarketLine

Iran is a growing hub for transportation, acting as a critical connection point between India and Russia/ Europe. Until recently, the Suez Canal served as the quickest transport route between India and Russia however with Iran undergoing rail infrastructure upgrades and also building part of the North-South corridor, Iran is set to become a key part of the ongoing development of transport links using the rail network. The North-South corridor has the potential to cut the transport time by around 50% and is sure to disrupt the naval transportation market…. Read more

Iranian aviation industry will witness strong growth post removal of sanctions: Threat of renewed sanctions under Trump presidency nevertheless persist.

MarketLine

After decades of sanctions, the US government under Obama announced in early 2016 that it was lifting sanctions on Iran, due to the latter’s compliance with the IAEA over its nuclear programme. One of the strongest beneficiaries of this removal of US led western sanctions on Iran seems to be the Iranian aviation industry, which in recent months has concluded billion dollar deals with major aircraft producers such as Boeing and Airbus, for the purchase of hundreds of planes. The deal with Boeing alone is said to go as far… Read more

COMAC C919 Airliner lands

MarketLine

When the COMAC C919 launched, comparisons were immediately made with the failed Bombardier effort to break the Boeing/Airbus duopoly. Bombardier failed for several reasons, chiefly because it was unable to gain the required customer base needed to gain traction in the airline industry. This does not apply to COMAC: the company has a ready-made market of state controlled airlines, colossal state backing and provides fantastic opportunities for foreign companies. These factors will aid the company to make serious inroads into the Chinese domestic airline market, providing the impetus for future… Read more

Will the new Mitsubishi Regional Jet (MRJ) erode Embraer’s market share?

MarketLine

In the 1990s, Embraer and Bombardier identified a gap in the production of an aircraft sized for efficient operation in the regional jet market in Europe, Asia, Africa and, particularly, in the United States. Regional American airlines were increasingly demanding an aircraft designed specifically to serve markets that can be optimized with 37 to 110 seat capacity equipment. The production of Embraer Regional Jet-145 (ERJ-145) launched the company into the lucrative regional jets market in 1996, only two years after privatization. Prior to 1996, Bombardier was the sole player in… Read more

Ryanair profits soar as evolution of business model delivers results

MarketLine

On Tuesday 26th May, Ryanair Holdings (Ryanair), a low-fares scheduled passenger airline serving 1,600 short-haul, point-to-point routes across Europe; announced a 66% year on year increase in net profit. The company’s growth is no surprise to Marketline- the evolution of Ryanair’s business strategy was extensively examined in a March 2015 Case Study,  Cheap but no longer nasty: evolution at Ryanair, which predicted Ryanair shareholders were set to benefit from a sustained period of strong cash generation, as the ‘Always Getting Better’ program  delivered continued growth in passenger volumes.  The program,… Read more

Boeing and SpaceX to launch astronauts: Bad news for Virgin Galactic?

MarketLine

The ISS was originally designed and tested to provide an operational lifetime of 15 years; this period passed in November 2013. In January 2014, NASA announced its intention to extend ISS operations until 2024, giving a new 26-year life span to the station. However, at the same time, NASA’s budget has been falling in real terms and the agency has had to develop new relationships with private enterprises, such as SpaceX, Orbital Sciences and Sierra Nevada, in an attempt to allow competitive forces to drive down the cost of rocket… Read more

Swiss reject $3.5bn Saab Gripen NG fighter deal in referendum

MarketLine

A referendum in Switzerland has seen a narrow rejection of the $3.5bn acquisition deal for next generation of Saab Gripen fighters. 53.4% of voters opposed the deal for 22 planes. Switzerland’s political process permits holding a plebiscite to reconsider a recently passed law if 50,000 signatures are collected. The Gripen had been selected in 2011, but had only reached Swiss Parliament approval in November 2013. The decision may have been due to considerations of neutrality, as Switzerland hasn’t deployed its military for over 200 years. In a recent crisis where… Read more

Sudden End To Kingfisher’s Reign

MarketLine

Kingfisher – popularly known as King of good times – was established in 2003 by the liquor baron Dr. Vijay Mallya, who named the company after his favorite beer. After a modest start in 2003, Kingfisher managed to quickly build a strong brand and high visibility, by becoming the first ever player in the Indian airlines industry to operate in the lucrative niche of premium domestic flights and rapidly growing its base of happy customers. The company made all efforts to make the flight and the whole travel experience as… Read more

Global air passenger numbers to double in 20 years

MarketLine

Airbus, the European plane manufacturer, predicts that air passenger numbers will more than double globally over the next 20 years from 2.9 billion to 6.7 billion in 2032. The France-based manufacturer attributes this growth to a bigger global middle class, urbanization, migration and tourism. Airbus also predicts that 29,220 new aircraft will be needed over the next 20 years, in order to meet this increased traffic. About 10,400 planes of the total number will be necessary just to renew existing fleets. Overall, new orders for aircraft would amount to $4.4tn…. Read more