Is the state of the global aviation industry going to affect TMCs?

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The global travel and aviation industries have consistently been in a state of flux and have come under criticism for their lack of significant profits. However, the last few years have seen a turnaround.

An increase in global profits has largely been due to low oil prices and "significant consolidation among carriers in key markets", according to Buying Business Travel Magazine.

In fact, the International Air Transport Association (IATA) reported that global airlines made a profit of around $35.6 billion (£29.2 billion) last year. This was excellent news, not only for airlines themselves, but also for those who worked in this industry, including Travel Management Companies (TMCs), among others.

An upshot in business for airlines and their subsequent profit automatically means that TMCs and travel managers have also benefitted from more trade, and although Alexandre de Juniac, IATA director general, estimates a less profitable year than the last, 2017 still looks as though it's going to be fruitful.

This is particularly impressive, considering all those connected with the travel industry - and particularly those who work in the corporate travel arena - have come up against a huge array of political, economic and security issues over the past year.

Having said this, Mr de Juniac commented that the peak for the travel industry was going to be between 2015 and 2017. This awkwardly poses the question 'What is going to happen to the international airline in the upcoming years and how will it affect TMCs and travel managers?'.

According to data from the IATA, it seems that European travel companies have been struggling more with their profits than those in North America, which have seen the largest profits of all.

Although the UK is still part of the European Union, the impact of Brexit has seen a massive fall in the value of the pound against other currencies and is hitting hard on the profits of many of Europe's major airlines and, so following, TMCs.

International Airlines Group, which includes the likes of easyJet and Ryanair, are now turning to budget long-haul flights to up their profits. If TMCs and travel managers are to be unaffected by the change in political and economic change, they will have to think about familiarising themselves with the plans airlines are making for the future.

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Phone: +45 4363 2266