Aviation



The aviation industry continues to experience enormously testing times. The driving factor is the weakened global economy. The uncertain outlook makes predicting passenger and cargo demand
increasingly difficult. The industry is continually having to adapt to a variety of demographic, political and regulatory changes. These range from a growing demand for air transport in Asia, to new taxes, surcharges, and environmental and security requirements set by Governments.
 
 
Introduction 
 
1  For all airlines and airport operators,
adapting is part of survival.
• 
Many airlines have developed innovative alliance and joint-venture structures to work around
route right rules and foreign ownership restrictions. Given the cost structure of the airline industry, the trend to consolidation is likely to continue.
• 
As oil prices remain high, airlines must ensure cost efficiency elsewhere. To be competitive, airlines must keep their supply chains and operations lean. They must ensure cash is managed
effectively. As aviation taxes increase in many countries, it is important to keep operations tax efficient where possible.
• 
Many airlines around the world are restructuring to match changing circumstances. This is being achieved through a variety of options or
 
 
For all airlines and airport operators,
adapting is part of survival.
• 
Many airlines have developed innovative alliance and joint-venture structuresto work around
route right rules and foreign ownership restrictions. Given the cost structure of the airline industry, the trend to consolidation is likely to continue.
• 
As oil prices remain high, airlines must ensure cost efficiency elsewhere. To be competitive, airlines must keep their supply chains and operations lean. They must ensure cash is managed
effectively. As aviation taxes increase in many countries, it is important to keep operations tax efficient where possible.
• 
Many airlines around the world are restructuring to match changing circumstances. This is being achieved through a variety of options or established airlines with aging IT infrastructure. Protecting customer data is essential. If managed appropriately, it can enhance the customer experience. If managed inappropriately, it presents a major reputational and legal risk.
• 
Airports are being privatized or changing ownership more regularly.
This presents an opportunity for international airport owners to expand. For example, airport
regulators in Asia are looking for  foreign or domestic partners. These partners are needed to provide the funding and expertise to meet the unprecedented regional demand for new and larger airports.These are challenging times for the industry. This document presents a selection of KPMG member firms’ work in helping clients navigate their way through this complexity.