Page 24 - AAA APRIL - MAY 2017 Online Magazine

MRO FEATURE OVERVIEW

Back to Reality

after a record-breaking and near-perfect 2016, airlines globally
are having to deal with challenges in 2017
By Arun Sivasankaran

even As AirLines exPerienCed A Crude oil prices have more than doubled
banner year in 2016, there was a lurking fear from a low of $26 per barrel in February
among the players and onlookers that the fun 2016 and that has started reflecting on
wasn’t going to last too long. As it turned out, fuel prices as well, with the cost going up
it did not. As early as in first month of 2017, 60 percent. Experts believe prices could
an expert had warned players in the industry go up further, in 2017 but not significantly.
to brace themselves for tougher times. “I The increase in prices may well be the most
am seeing some headwinds,” said Jonathan important one, but it is not the only factor
Berger, ICF’s vice president of aerospace and that has altered the scenario. Berger expects
MRO advisory at MRO Latin America. “I don’t three other factors to negatively impact the
think it is going to be a bad year. It will be a industry this year - the growth of populism
year that the industry blinked.” and nationalism, as can be seen from Brexit,
In a way, the downward trend was to be renegotiating NAFTA and the Trans-Pacific
expected. The never-before heights touched Partnership, increasing interest rates, and
by the industry in 2016 was due to a happy the strengthening US dollar. Just three
confluence of a variety of factors such as months into the year, the impact of some of
record passenger volumes, record cargo these factors are already being felt by the
volumes, industry consolidation and low fuel industry. However, there is plenty of good
prices. The scenario does not exist anymore. news as well.
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