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Ray K
Ray K Mohon Tunggu...

I am trying to be an economist who is able to improve global economic




"The Challenges of Airlines"

1 April 2018   13:50 Diperbarui: 1 April 2018   13:57 399 0 0 Mohon Tunggu...

Nowadays, the aviation industry is one of the growing industries. Years ago, it was only rich people who were able to use aircraft for their journey. However, presently, more people are able to take aircraft for their journey. In 2017, the number of aircraft passengers in Soekarno-Hatta airport increased by 8% to 63.01 million people (, dated January 7, 2018). Technology developments enable to reduce the operating costs so that the airline can offer affordable ticket price to all customer segments. Moreover, some airlines offer low-cost carrier services in order to offer more affordable ticket price to low-middle income segments.

The airlines which are originally from Indonesia have been well-acknowledged internationally. For instance, Garuda Indonesia received a 5-star Airline Rating from Skytrax due to the quality of its Onboard product and staff services, and also the Garuda Indonesia home base Airport service. However, at the moment the airlines face a tougher challenge.

First, the challenge comes from the competition between airlines. There are many airlines emerging throughout the world. Each airline offers different strategies to grasp the market which leads to a tighter competition between airlines. Basically, major airlines employ the similar aircraft series which were produced by either Boeing or Airbus. The difference is only with the Onboard services provided by each airline.

The second challenge for airlines comes from the increased of jet fuel price. In 2017, the average jet fuel price increased to 25% compared the previous year. As the consequence, some airlines suffered a loss due the higher of operation costs. Neither Indonesian full carrier airline nor low-cost carriers reached a selling growth more than three times of Indonesian economic growth. Therefore, if the airlines do not think about it seriously, the airline's profit erodes gradually in the coming years.

The conclusion, the aviation industry is a unique industry. There are many things influencing the success of the airlines in the aviation industry. To succeed in this industry, the airline should set appropriate strategies and target the clear market. At the moment, every airline has both full service and low-cost carrier so that the airline can compete in each segment. Efficiency is another key to success in the aviation industry. Jet fuel as one of the biggest expenses is highly reluctant with price fluctuation. The airline cannot reduce the consumption of jet fuel, yet the airline can manage carefully the usage of the jet fuel.