With the United States in its' current economic situation, our aviation industry is definitely taking a hit. It has been difficult enough for the industry to regain the trust of its' passengers after the events of September 11, among other terrorist attacks, and adding economic stress to the nation only amplifies the difficulty of the current state of the industry. Fuel prices continue to increase, which is a very large cost for airlines to overcome. I have heard that the industry is starting to make a recovery, and hope this is the case, but what have you heard or witnessed?
A few countries elsewhere in the world seem to be doing remarkably well, and show no signs of letting up. I found a USA Today article titled 'China's set to rule the skies of air travel' written by Charisse Jones (2013) who starts the article with, "Beijing Capital International is poised to become the world's busiest airport by the end of this year, toppling Atlanta's Hartsfield-Jackson". This is not the only statement in the article that proves that the Chinese aviation industry is flourishing, she also says that industry analysts expect China's market for air travel to overcome that of the U.S. in the next two decades. This information is not entirely bad news for the U.S. though, it creates a perfect opportunity for our industry to take advantage of the increasing demand for international travel (Jones, 2013).
How is our industry struggling and barely sustaining itself while China's is growing and doing so well? There are a few things that are helping them. First off, China's economy is now the second largest in the world and with a population that is much larger than ours, supplemented with an economy that is growing, it makes sense that their aviation industry would also be doing well. The second reason that their aviation industry is doing so well is because they have a growing middle class who now wants to travel (Jones, 2013).
United and other U.S. airlines have been increasing their services to China and trying to form relationships with the airlines there to tap into this growing demand. International travel is not the only type of travel that is increasing and helping their aviation industry outlook, between 2008-2012 there were twenty four commercial airports that were built in China. The Chinese domestic air travel is also expected to increase greatly in the coming years (Jones, 2013).
With all of this growth, there will also be an increasing demand for pilots and other aviation personnel. In fact, a forecast from Boeing last year estimated that China will need 71,300 pilots over the next twenty years. The country is offering many perks and is easing the requirements to try and get more candidates to apply, but is having some difficulty (Jones, 2013).
With all of this opportunity on the horizon, would you be willing to move to China to start your career? With their aviation industry growing so rapidly and their economy doing well, do you believe that their industry will soon be the most dominant in the world or do you think that it will stumble because the infrastructure will not be able to keep up and will not have a proper means to support it?
China is not the only place that is experiencing growth in their aviation industry. Kazakhstan's passenger market is expected to be the fastest growing over the next five years according to an IATA projection. This projection is expected to hold true for both international and domestic traffic, and by a wide margin (CAPA, 2013).
Kazakhstan is positioned well geographically since it is located just south of Russia and is in the north end of Central Asia. It is in a perfect position to connect Central Asia, as well as Russia. It is also in an area that could facilitate connection of China with Central Asia. Another benefit of Kazakhstan's location is that it happens to be halfway between the Far East and Europe, with all of these growing markets around, there are a lot of opportunities to continue to grow (CAPA, 2013).
There are concerns that lack of airport growth at Kazakhstan's largest international airport, along with others, will limit the growth potential of this industry. If the airports are able to get the funding they need and are able to expand as needed, their industry looks like it will continue to grow (CAPA, 2013).
Obviously there are other countries that are experiencing increased growth in the aviation industry as well, but these are just two examples. I believe that the U.S. industry will rebound within the next five to ten years as the economy improves, and hopefully we will be back to where we were prior to 9/11. I believe that this stimulation will have to start with the economy turning around which will allow people to travel like they did in the past. What do you believe the state of the aviation industry in the U.S. will be in the next five to ten years?
Thank you for reading,
Kyle Wagenknecht
References
CAPA Center for Aviation (2013). Air Astana plans for more rapid regional growth as Kazakhstan emerges as world's fastest growing market. Retrieved January 21, 2013, from http://centrefor aviation.com/analysis/air-astana-plans-more-rapid-regional-growth-as-kazakhstan-emerges-as-worlds-fastest-growing-market-94225
Jones, C. (2013). China's set to rule the skies of air travel. Retrieved January 21, 2013, from http://www.usatoday.com/story/travel/flights/2013/01/20/china-air-travel/1846595/
Kyle:
ReplyDeleteYou offer some interesting questions and insights.
In your opinion, other than increasing services to China, what are some other ways that the U.S. aviation industry can capitalize on China’s growing economy, and its growing aviation industry?
You make a good point about China’s aviation infrastructure. Compare the U.S. Infrastructure with the amount of air traffic. How are the two countries similar? How can China learn from the U.S.? Could our experience with this situation help the Chinese?
Would you move to China to begin your aviation career? What are the pros and cons?
Dr. Tartalone
I think that the U.S. aviation industry can benefit from China's growing economy and aviation industry by offering to give insight on how to maintain safety standards, among other aspects of the aviation industry. The U.S. has proven to be one of the safest places for aviation, and I believe other countries currently developing their aviation industry look to the U.S. for a framework to base their operations off of. This opportunity could be a great facet to work off of, and as Jay stated, develop some sort of Quid pro quo agreements for the future.
DeleteAs far as the infrastructure goes, I am not very familiar with how the Chinese system works and operates. I was simply posing the question because of their extreme expansion and how problems could arise due to this growth. I believe the the U.S. airspace is more densely traveled than the Chinese at the time being. If their growth continues at the rate it has been, I believe they will surpass us somewhat quickly. Yes, I believe the U.S. can provide insight to the Chinese on how to maintain airspace congestion and solve related problems.
I would not like to move to China to begin my aviation career. I believe that there is enough opportunity here in the United States and that moving out of the country to start work would only be adding to the negative state of the U.S. industry and economy. I also believe that living in a different country that speaks a different language would be very difficult. It would also be a completely different lifestyle with the cultural change and not something that I would be particularly interested in. If I were to start a job here in the U.S. and be asked to go to China to help with some sort of issue or project for a brief period of time, I would jump on it immediately because that would be an amazing opportunity.
When you say United and other U.S. airlines are expanding their services to China in hopes to get more business, do you think airlines in China are doing the same thing to the United States? If so, do you think this could hurt the U.S. economy?
ReplyDeleteI do believe that the Chinese will be doing the same thing if they have not already. I believe that this will be beneficial to the U.S. industry because it is another source of revenue when planes come and go off of our nation's airports.
DeleteHey Kyle, I really liked that you were able to point out the opportunities for market growth as the result of emerging airlines in foreign countries. The demand for more international airline service globally is the best growth opportunity for the industry in many years. Developing partnerships that are profitable for everyone will be the key to being able to have a real controlling stake in the development of these international markets. IF China would like to have more service to America, it would be in America's best interests to develop some Quid pro quo type of partnerships with regard to use of airspace, airfields, and other infrastructure resources.
ReplyDeletekyle,i like your post specially when you concetrate on china aviation industry and how they are improving their industry and increasing their services and demand. (Obviously there are other countries that are experiencing increased growth in the aviation industry as well, but these are just two examples. I believe that the U.S. industry will rebound within the next five to ten years as the economy improves, and hopefully we will be back to where we were prior to 9/11) I hope so and i can't wait to see that improvement
ReplyDeleteKyle, I really enjoyed your post. I think that Aviation Industries in other countries provide the opportunity for the expansion and growth for our own Industry. My question to you is with the growth of China's middle class and the expansion of their aviation industry what benefits do you think that the U.S. Aviation industry could us this opportunity to capitalize on?
ReplyDeleteAdam, I believe that if we market the United States correctly to this growing section of people, there could be a great potential for increased travel to/from China. With their middle class growing, an increasing amount of people will have a larger discretionary income and these people people may want to come vacation in the U.S. and fly on our airlines to do so encouraged by package deals.
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