Precision Air plans to review its five-year strategic plan as part of its plans to expand into new markets (eTN, 07-Jun-2013). Precision Air CEO Sauda Rajab said the airline is looking to map out a revised course for the airline’s fleet and operational expansion and planned to reassess its current position. Ms Rajab said, “The next 5 years will be exciting ones for the airline, and the plan will involve massive growth in Precision Air’s operations and will, therefore, require major injection of funds. Various investment options are being reviewed, and once the plan has been finalised and approved by the Board, it will be shared with various stakeholders and the public at large”.
Precision Air to review its five-year strategic plan
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CAPA global airline financial outlook
Operating margin to reach new high in 2016, but this may signal a subsequent downturn. CAPA’s global airline operating margin model indicates that the industry was more profitable in 2015 than it has been for almost five decades. Moreover, the model predicts that world airline operating margins will rise further above previous historic peak levels in 2016. These new levels of profitability are mainly thanks to the low oil price environment, coupled with strong demand growth in spite of global economic growth rates that are far from exceptional.
Much of the industry is also benefiting from a period of relative capacity discipline. New revenue sources may also be helping, although their role in airline profitability is still emerging.
The macroeconomic and geopolitical backdrops provide the main risks to this forecast. Beyond that, the biggest challenge for the industry will then be to try to sustain margin levels, rather than to allow a peak to be followed by a rapid downturn, as has always happened in the past. But downturns can play a positive role in industry development, possibly even stimulating consolidation.
Global airline financial outlook
Operating margin to reach new high in 2016, but this may signal a subsequent downturn