Continuous transformation needed to thrive in volatile airline industry

THROUGHOUT its nearly century-old history, the environment in which airline executives operated has been one of ups and downs driven by economic cycles, industry regulation constraints and shifting business landscapes - sometimes referred to as the "constant shock syndrome".

In addition to ongoing economic uncertainties and political instability, current examples of "constant shock syndrome" hitting the airline industry include threats from terrorism, manpower challenges and currency fluctuations. Nearly all airline carriers incur both costs and revenues across a number of currencies that require conversion into a different currency. This forms the basis of an airline's foreign exchange (FX) risk.

Rapid growth is also creating a shortage of airline technical professionals, including pilots and engineers whose careers and skills capabilities are developed over several years. Meanwhile, headline grabbing threats and acts of terrorism can lead to a drop off in passengers travelling to certain destinations. But depending on the threat or whereabouts of a terrorist attack, there can be a quick resumption of travelling passengers.