Implications For The Aerospace Industry In 2018


While the aerospace has been occasionally plagued with aircraft shortages, rising fuel prices, and toxic publicity, both the Federal Aviation Administration (FAA) and the International Air Transport Association (IATA) feel that 2018 could be a turnaround for the industry in more than one area. Read on to learn why many experts feel that 2018 could be a return to friendlier skies for the aerospace industry.


Positive Aerospace Trends in 2018


1. Traveling

As economies in a number of countries continue to improve, more people are traveling, and are traveling by air. Industry analysts are predicting slightly over a three percent increase in commercial passenger traffic compared to 2017, and ticket revenues of as much as $581,000,000,000 this year.

2. Freight

Although air cargo revenues aren’t expected to be as high as they were in 2017, analysts feel that they’ll still be fairly strong with a four percent increase in revenue this year, driven by the transport needs of online shopping vendors.

3. Employment

There will be more employment opportunities and more people available to fill them in 2018.

4. Routes

Airlines will be adding and creating new travel routes in 2018. This will reduce travel times for some flights, and allow additional ones to be scheduled. The predicted results are more efficient scheduling and increased profitability.

5. Debt Reduction

Increasing revenue over the last few years has allowed the aerospace industry to pay down debt and dividends on a global level. The reduction in debt will lead to lower interest rates, adding to increased profitability overall for the industry.



Challenges For The Aerospace Industry in 2018

While most analysts agree that the industry will continue to enjoy financial growth, they note that this is a cyclic industry that can be affected by a number of factors. Among them:

1. Infrastructure

Many aerospace facilities are long overdue for upgrades, repairs, and expansions. The lack of them could affect both traffic and how these facilities can be used.

2. Labor

While there has been an uptick in hiring, more employees means more salaries plus paying competitive wages, cutting into profit.

3. Supply Versus Demand

Airlines currently aren’t producing enough new aircraft to meet traveling demand. Until this demand is met, the industry can expect to deal with delay, scheduling, and overbooking issues.

4. Oil Prices

Crude oil prices are expected to begin increasing in 2018 as current oil supplies shrink. This will drive up the cost of all fuels, including aircraft.