Associated Press reporter Joshua Freed asks a simple question in a news report today: "Why's it so hard to make money running an airline?
His answers make you wonder why anyone would even try:
- Planes are expensive: A Boeing 737 costs $80 million and leasing one comes to about $3.6 million a year.
- Oil prices are volatile: In its restructuring documents, American Airlines indicated its annual consumption of around 2.5 billion gallons of jet fuel will cost $17.25 million more this year.
- Specialized labor: Pilots, mechanics and other employees have very specialized jobs demanding higher salaries. Government regulations and union contracts limit the length of workers' shifts, often creating logistical challenges.
- Recessions: Less business, means less business travel. Less jobs, means less general air travel and vacations.
- The uncontrollable: Snowstorms, volcanic ash clouds, earthquakes, outbreaks of diseases like SARS and terrorism can ground planes or scare away passengers.
- Fickle fliers: Brand loyalty? Not on your life. We'll all fly somewhere if we can do it for less.
- Your competition doesn't even have to make money: Virgin America has lost $661.4 million since it started flying in the summer of 2007 yet continues to grab market share.
In a telling quote, Jeff Smisek, CEO, United Holdings said in October: "It's a business where competitors enter your market at 540 mph."
Given all this turmoil, what attracted you to the ground support industry? What makes you persevere in such tough times? Let me know.
In the meantime, I think that's a pretty good segue to remind everyone to send us your nominations for our Ground Support Worldwide Leaders of the Year Awards. We've narrowed the awards down to three:
- Lifetime Achievement Award: This award will go to a person who has demonstrated commitment to the industry through numerous years of dedicated service.
- Team Leader Award: This award will go to an individual who has taken a leadership role with personnel.
- Product/Service Award: New this year, this award celebrates the products, services and manufacturers making a difference in the industry.
The awards will be presented to the winners during a Network Reception, which will also feature our popular truck giveaway, Thursday night, March 8, during next year's Cygnus Aviation Expo in Las Vegas.
Send your nominations to: Missy Zingsheim at missy@AviationPros.com
Please tell us which award you are choosing and include the name of the person, product, service and/or manufacturer you are nominating, as well as your award-winning reasons.
The deadline for nominations is Jan. 4.