SWOT Analysis of Aviation Industry. The aviation industry comprises various activities relevant to the aircraft and mechanical flight industry. Airline companies offer air transport services for freight and traveling passengers. Airlines offer such services by developing alliances and partnerships with other airlines under the codeshare agreement.
Some of the main types of passenger airlines in the aviation industry are as follows;
- Major Airlines in the US
- Legacy Carriers
- Flag Carriers
- Charter Airlines
- Business Class Airlines
- Low-Cost Carriers
- Regional Airlines
- Mainline Airlines
Key statistical factors and figures about the aviation industry are as follows;
- The annual revenue of the commercial airlines in 2021 was 506 billion US dollars
- The annual revenue of the US airlines in 2022 was 279.6 billion US dollars
- Net profit of the airline industry in 2023 was 9.8 billion US dollars
Some of the top airline companies in the aviation industry are as follows;
- Rolls Royce
- GE Aerospace
- Northrup Grumman
- Lockheed Martin
Today, we’ll discuss the swot analysis of aviation industry. It is going to focus on the internal strengths and weaknesses; external opportunities and threats to the airline industry. Here’s the swot analysis of aviation industry as follows;
Strengths of Aviation Industry
Some of the main strengths in the swot analysis of aviation industry are as follows;
The aviation industry has been growing consistently and has reached a level of maturity with a demand growth rate of 4.3%. Current statistical facts and figures about the growth rate of the aviation industry show that the aviation industry has got great growth potential in the upcoming years. It means that the customers and stakeholders have put great trust and confidence in the aviation industry to generate more revenue and profit.
According to an estimate, approximately 3700 people die annually in road accidents. If you are traveling in an airplane, then your chances of accidents are 1 in 7 billion. However, if you are traveling by train, then your chances of an accident are 1 in a million. It shows that the airline industry is the safest mode of transportation compared to others.
The aviation industry has established a strong database of loyal customers across the world. The airlines save a lot of time for customers by offering air travel, and that’s why many people prefer air travel when it comes to it. According to an estimate, approximately 2.2 billion people bought airline tickets by 2021, it is a fairly large database of customers and the figure is increasing annually.
Weaknesses of Aviation Industry
Some of the main weaknesses in the swot analysis of aviation industry are as follows;
Spoilage rate means that the passengers miss their pre-planned air flight; it is very high in the airline industry. According to the rules of aviation, the company should refund the ticket price in case the customers miss their flights. High spoilage means the loss of revenue and profitability for the company. Often, customers miss their flights because they know that they would catch the other one.
High Carbon Emission
The consumer market has become highly cautious about environmental issues like global warming. It has made many government and legal institutions impose laws and restrict companies to reduce their carbon emission rate. According to an estimate, approximately 12% of the total carbon emission is from the airline industry.
The aviation industry has become highly competitive recently because of the presence of various airlines offering air travel services. In order to increase their profitability and gain a competitive edge, they launch various types of marketing and promotional campaigns to attract the attention of customers. It has become very difficult for airline companies to maintain their position in the airline industry.
Opportunities for Aviation Industry
Some of the main available opportunities in the swot analysis of aviation industry are as follows;
Technological development is bringing a lot of revolutionary changes in almost every field of life including the airline industry. It presents a great opportunity for the aviation industry to take advantage of the latest technology and launch fuel-efficient and low-carbon emitting airplanes. Limited fuel consumption would help the company to decrease the operational cost, and increase the overall profitability of the aviation companies.
Growing Tourism Industry
Traveling videos and vlogs on social media have increased the trend of traveling and tourism. According to an estimate, the tourism industry would grow and increase by 5.8% by the end of 2032. Growth in the tourism industry means that more people would travel to other countries, and they travel by airplane.
High Standard of Living
Air Traveling is costly and not many people could afford air travel. But the standard of living and disposable income have increased significantly. Economic growth has made it possible for many people to buy and afford air travel; it suggests a growth in the airline industry.
Threats to Aviation Industry
Some of the main potential threats in the swot analysis of aviation industry are as follows;
Natural disasters like tornados, storms, thunderstorms, and other natural calamities have significantly impacted the growth of the aviation industry. Under such weather conditions, people avoid traveling, high spoilage rate would decrease the growth and profitability of the company.
Internal political conflicts, high oil prices, increased inflation rate, and the unemployment rate have put the global economy into recession. When people have limited purchasing power, they won’t spend on luxury air travel; rather their focus is meeting their basic necessities.
Conclusion: Aviation Industry SWOT Analysis
After an in-depth study of the swot analysis of aviation industry; we have realized that the airline industry plays a key role in the growth of an economy. If you are learning about the business of the aviation industry, then you should keep in mind the abovementioned internal and external factors.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.