Of course running an airline is going to involve huge amounts of money. This is not the sort of business just anyone can set up, but if you’re a multi-billionaire looking for something interesting to invest in, would an airline be worth it?
Are airlines a lower risk than they used to be?
Some say that running an airline has become less risky and that airlines today are less likely to go bankrupt. Safety procedures always improve year on year, but there will always be risks that cannot be planned for. Remember when the Eyjafjallajökull volcano in Iceland brought forth a massive dust cloud? Not only was it a nightmare for news reporters to pronounce, but it brought air travel to a virtual standstill. One can but imagine the economic impact this had on the airlines! Then of course, there’s the simple fact that planes are very, very expensive in so many respects. Buying a spare part for a plane is not like buying one for your car. When something goes wrong with a plane, it’s never going to be cheap to fix it. They’re expensive to buy, they’re expensive to maintain and the fuel costs to run them are pretty horrifying!
Reputations can be won and lost fast
These days, news spreads fast. One unfortunate accident can ruin an airline’s reputation overnight. With social media so prevalent, bad news can be all over the globe in seconds. Literally. It only takes one passenger with a smartphone to video a crew member behaving inappropriately and it’s all over Facebook and Twitter. If an incident is more serious, perhaps there’s been an emergency landing due to a fault, then an airline can quickly lose potential passengers as they doubt their safety and fly with other carriers.
Ups and downs depending on the economy
Of course many businesses are dependent on the state of the economy, but air travel is one area that is particularly affected. When people have spare cash, they’ll spend it on travel. When businesses are doing well, there will be more business passengers, but when times are tougher, it’s luxuries like air travel that is cut out first. Businesses can conduct meetings remotely far more easily these days with video conferencing and a wide range of collaborative working tools available. There is less need to meet people in person and if budget cuts need to be made, those expensive flights are likely going to be the first thing to go.
Emily is an avid writer with a passion for the travel industry. She also loves learning and writing about nutrition and healthy living. Emily is based in the UK.
