"Aviation. Gloom or Boom!?"
There’s been a global economic meltdown. We all know that. Between sub-prime mortgages and Wall Street shysters it can be difficult to focus of any glimmer of hope as the headlines remind us that Greece is on its fiscal knees. Yet as the aviation industry feels its share of the pain, it may just be what needs to be done.
To put it mildly, there is no hiding the fact that aviation has been feeling the pinch. When the GFC first hit, airlines were cutting capacity as businessmen and holiday-makers abandoned air travel and the regional operators that hub from these services suffered the knock-on effect. Manufacturers’ order books were in disarray with cancellations and deferments while flying schools wondered when the next student would be walking through the door. These were tough times, but not for the first time.
Boom or bust, peaks and troughs, aviation has always been and industry of cycles. There are always challenges on the horizon that intensify and then dissipate just in time for another concern is raised. Prior to the current economic crisis, rising oil prices appeared to be the major issue for the industry, yet oil had also gone through the roof in 1973 in unison with a significant stock market crash. In the longer term the status quo ultimately returned.
Following the events of September 11th 2001 and the subsequent onset of Severe Acute Respiratory Syndrome (SARS), the naysayers were announcing aviation’s Armageddon. These events were directly linked to the industry and falling passenger numbers resulted from core issues, not as a by-product. We saw the industry totally rethink its approach to safety and security measures at great expense and the World Health Organisation eventually advised that SARS “risk of transmission in aircraft is very low”. Again, in the longer term, the status quo ultimately returned.
Aviation is not alone in the face when the global economy hits the skids, yet the industry generally seems to approach hard times from a negative perspective. The financial markets have been at the centre of the latest dilemma, yet for better or worse, those markets continued to talk up a recovery. Similarly, governments recognised the severity of the times, but sought to dispel panic and look for solutions to stimulate the economy. In any aspect of life, tough days are not the time to be bogged down in a mire of ill thoughts, they are the time to regroup, re-assess and plan. When the starboard engine fails we’re trained to shut it down, increase the power on the remaining engine, devise an alternate plan and get on with it. There’s no time for throwing the hands up in despair.
Before the global crisis, the industry was confronted with mammoth growth in the Chinese and sub-continent markets. There was a looming pilot shortage and airlines were seeking compensation for missed aircraft delivery deadlines as they ached for more capacity. While this changed in a matter of months, the fundamental issues remained; they were merely masked by the economic climate. Already some markets are starting to recover and the shortages of men and machines will return.
Savvy investors recognise when the markets are on their knees. They don’t sell in these trying times, they buy shares and property while prices are low and exercise a degree of patience. Similarly, in aviation such dark days may well be the time to look forward and take a brave step. Perhaps now is the time to learn to fly if a career in aviation is a personal goal. By training in the lull, there are very few employment opportunities to be missed, but when the world economy rights itself the newly licensed pilot is qualified and ready to go. Furthermore, there may be some latitude to negotiate the cost of training as schools compete for the rare commercial licence candidate.
For aviation companies, the harshness of the down-times can highlight those aspects of the operation that were the weakest and where changes need to be made. Similarly, it offers a respite to consolidate the more viable aspects. There may now exist an opportunity to refurbish some of the existing fleet, or attend to in-house training, auditing or administration that was overlooked in the busier periods. Now is the time to refine an operation and prepare it for the inevitable upswing whilst making it robust enough for the next downturn. Farmers have lived in cycles of feast and famine since time began. The successful ones recognise the importance of consolidation and planning for poor seasons and that a failure to do so spells trouble. Perhaps aviation needs to learn a few lessons from its rural brethren.
There is no denying that our world is currently confronted by economic challenges of tremendous proportions and the aviation industry is not exempt from the flow-on. However, the road to recovery cannot be built on a base of pessimism. As with all aspects of aircraft operation, the approach needs to be prepared, realistic and level-headed. Sound decision-making is a benchmark of a good aviator and it applies equally to all of those involved with aviation in such trying times.
Sometimes, the ability to regroup and look ahead is difficult, but essential. This industry is one of upswings and downturns, just ask anyone who has been involved for any length of time. As the famous quote states, “Those who cannot remember the past are condemned to repeat it.” Tough times are there to remember and to learn from, not dwell upon unnecessarily. In many instances, how we tackle those tough times and prepare for the future will define our long term viability. While global fiscal management may sit beyond our realm and reach, the approach to our own industry is far more immediate. How we manage the present and look to the future may well dictate whether we are ultimately confronted by gloom or boom.