How Is the Current Economic Crisis Expected to Affect Your Customers' Ability to Purchase Your Products?

1. How is the current economic crisis expected to affect your customers' ability to purchase your products?

The airline industry, like most other industries has suffered from the economic recession. The financial condition of the U.S. airline industry closely mirrors the overall economic condition of the country. The economic downturn resulted in a global passenger air traffic decline of about 2% in 2009. Global airlines suffered a $10 loss in 2009. Boeing claims that unstable oil prices, economic growth rates, currency exchange rates, and financing terms and availability over the past few years presented serious challenges to its suppliers. To adjust to market conditions airlines have cut unprofitable routes, reduced flight hours per day, and have becoming increasingly aware of their plain's fuel efficiency. Boeings suppliers have had to adjust to the difficult economic times and have subsequently reduced their orders from Boeing.

Fortunately, economists are optimistic about the future. Commercial aviation has undergone many devastating blows during revolutionary periods in the past, followed by a return to stability. As we emerge from the recession I believe that we will once again experience growth in the airline industry. As the job market slowly recovers and consumer spending rises, more goods will need to be shipped through the air requiring more airplanes in service. Many goods consumed in the U.S. are imported from overseas, particularly Asia. The growth of Asian exports will boost air cargo traffic which, according to a Boeing's Market Annalysis, should return to its 2007 peak by the end of 2011.

The travel/tourism industry should see positive growth over the next year as the unemployment rate slowly declines. Global passenger traffic is forecast to grow 6 percent in 2010 (Boeing). The increase in passenger traffic will boost the airline industry and strengthen the demand for new contracts. Boeing claims that over the next 20 years, it expects to build and deliver 30,900 new airplanes, valued at $3.6 trillion.