Airlines See Fuel Costs, Mandates, Customer Loyalty as Top Issues in Sabre Airline Solutions' Global Survey on Key Industry Challenges

While concerns about the environment are growing significantly in international markets, fuel costs dominate all other issues impacting the airline industry.


Environmental Challenges Business Editors/Airline Writers SOUTHLAKE, Texas--(BUSINESS WIRE)--May 7, 2007--While concerns about the environment are growing significantly in international markets, fuel costs dominate all other issues impacting the airline industry, according to results of a survey conducted among North American and international airline executives by Sabre Airline Solutions, the global leader of software and services for the airline industry.

By wide margins, leaders of the 197 airlines who participated in the survey viewed fuel costs as their top challenge and the most significant impediment to profitability. Government regulations and customer loyalty round out the top three issues impacting the airline industry.

"While most airline-related surveys reflect the opinion of passengers on airline service, our survey polled the world's top airlines on the issues that are directly affecting them, their operations and roadblocks to their successes," said Gordon Locke, vice president, Sabre Airline Solutions and Distribution Marketing.

The Sabre Airline Solutions survey highlights the emergence of environmental issues, as well as the disparity between airlines headquartered in North America and those based in Latin America, Asia, Europe, Africa and the Middle East. Only 5 percent of North American airlines currently view environmental concerns as a major challenge, while 34 percent of international airlines named it as one of the three biggest challenges they will face in 2007.

"As long as U.S. carriers are focused on survival and rebuilding their balance sheets, and their regulatory climate is not pushing hard, they will not likely embrace environmental concerns as much as European or other regions' carriers," said Steve Hendrickson, Sabre Airline Solutions senior strategist. "The momentum for potential regulatory actions against airlines' carbon emissions is much more pronounced in Europe than in the United States. Also, U.S. airlines are still obsessed with the emerging financial recovery they are slowly achieving, while carriers in many other regions are largely doing pretty well."

North American and international airlines were virtually identical on the impact of fuel costs with 95 percent of international and 94 percent of North American airlines saying it will have a "significant" cost, revenue or operational impact. Eighty-two percent of North American and 77 percent of international airlines said government regulations would have a significant impact; and 77 percent of North American and 74 percent of international airlines cited customer loyalty.

While high fuel costs are a top airline concern, the Sabre Airline Solutions consulting practice said cost savings in this unpredictable facet of operations can be achieved.

"Our consulting group recently engaged with a North American carrier and a Latin American carrier and found US$5.1 million and US$8 million, per year, of potential fuel savings for these carriers, respectively," said Khaled Al-Eisawi, of Sabre Airline Solutions consulting. "This level of savings opportunity is significant for any carrier."

He confirmed that high fuel costs are consistently being cited by airlines as their most pressing issue. "Airlines realize that they have to absolutely optimize their use of fuel resources to remain competitive," Al-Eisawi said.

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