According to the latest statistics given by the International Air Transport Association (IATA), the airline sector will post a profit of $9 billion in 2011. After the recent credit crunch, economies are now coming back to normal, business travel is increasing and investments in the airlines are now rising.
Over the years airlines have undergone large-scale privatization; previously a significant portion of airlines …show more content…
On the other hand governments support aviation industry by building airports, roads and hotels near airports, because they recognize this industry as an important ingredient for economic well-being. In addition governments arrange security at the airports to ensure safe journey. The terrorist attacks of September 11, 2001 have had negative implications for the industry. Over the years, all the airlines have changed their routes, marketing tactics and prices; they are also making an effort to reduce the fear and negative image associated with air-planes. Governments have imposed strict security checks on air travel passengers in order to avoid any unforeseen terrorist activity.
The growth of airline industry in any country is directly proportional to its GDP growth; the greater the business activity, the more air travel and the higher the GDP of the country. The demand of the aviation industry is based on the elasticity of demand and the current market condition. (InnovativeThinker, 2007)