The US Aviation Industry: Contemporary Issues

The aviation sector plays a pivotal role in fostering the development of the economies of different countries. In the United States, the aviation industry accounts for the transportation of almost a billion passengers annually. According to Chang, Park, Jeong, and Lee (2014), the industry is also responsible for triggering economic activities with a value of $1.5 trillion yearly. Besides accounting for the creation of at least 12 million jobs in the U.S. on a yearly basis, the sector contributes to a considerable 5% of the country’s gross domestic product (GDP) (Chang et al., 2014).

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However, various contemporary issues have the potential of influencing the U.S. aviation industry significantly. Such issues affect the positive effect of the industry on the economy. As the paper reveals, the current issues that are affecting the aviation industry include transportation congestion and delays, workforce matters, global environmental and energy concerns, and fluctuations in the prices of fuel.

Transportation Congestion and Delays

The growing number of passengers who use air transportation has raised concerns over the years, owing to the inability of the industry players to accommodate the travel demand. The problem is manifested in the frequency of transportation delays in the U.S. aviation sector today. Important to note, transportation congestion and delays cost the U.S. economy billions of dollars yearly (Baumgarten, Malina, & Lange, 2014). The negative economic impact necessitates the implementation of systematic interventions in the aviation sector to foster the capacity of accommodation to meet the growing population of passengers using the mode of transport.

Surprisingly, the 30 busiest airport facilities in the U.S. account for a significant 72% of the passengers (Lonzius & Lange, 2017). The situation denotes that the increasing travel demand is exerting pressure on the busy airports in the country. The case triggers delays that frustrate passengers, owing to the need for changing schedules. Such experiences undermine customers’ satisfaction in the industry, thus affecting the competitiveness of players in the sector. Since the need for maintaining customer loyalty and fostering the growth of an airline’s market share contribute to the success of a player in the industry, managing the transportation congestion and delays issue is crucial.

Airports continue to implement strategies that foster their preparedness to meet the increasing travel demand. However, according to Baumgarten et al. (2014), some aviation facilities experience capacity constraints that require fixing to enhance the sustainability of the sector. Amid the need for improvement, the modernization of the airport control systems is still slow in most of the airport facilities in the U.S. Since the 1980s, the U.S. aviation agencies have been underlining the need for the integration of contemporary technologies to advance and bolster the effectiveness of airport control systems (Baumgarten et al., 2014). However, the errors encountered in air traffic control still prompt the need for integrating systematic interventions that can ease transportation congestion in the U.S. aviation industry.

The failure of air traffic management software in some notable instances also contributes to the prevalence of delays in the aviation sector. Recently, a network issue that triggered the malfunctioning of Altea, an air traffic management system used by at least 189 airlines, led to delays amid no cancellations (Lonzius & Lange, 2017). This scenario points to need for addressing the issue of delays caused by the failure of software, which supports customer reservations. By so doing, the issue of transportation congestions and delays will enhance the efficiency of the sector in the U.S., as well as other countries. Furthermore, passengers will benefit from positive travel experiences with the airlines operating in the U.S.

The Aviation Workforce Issue

The human resources aspect of aviation industry operations is very critical since it plays an important role in influencing the competitive edge of the respective rivals. In the U.S. economy, concerns usually emerge over the sustainability of the workforce in the aviation sector, owing to the growing number of aging employees who are headed for retirement. Notably, the scarcity of pilots, maintenance technicians, and air traffic controllers is creating considerable worries among airline companies and airports in the U.S., thus necessitating the development of strategies that can help to manage the looming wave of mass retirements.

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The difficulty of attracting employees in the aviation sector is also a considerable issue that undermines the sustainability of the workforce. According to Zilman (2014), the low wages offered to the U.S. professionals in the sector discourage many people from pursuing careers in aviation. For instance, the wages and salary packages for new pilots usually fail to meet their remuneration expectations, thus undermining their motivation while at the same time discouraging potential pilots from pursuing such specialized paths.

Specifically, Zilman (2014) reveals, “average starting salary is even lower than that — $22,500 per year, which for a 40-hour work week equals an hourly rate of $10.75” (para. 2). Additionally, such professionals undergo extensive and costly training to acquire the relevant knowledge and skills required to execute their duties and responsibilities successfully. Consequently, the workforce shortage issue continues to prevail in the U.S. aviation sector, thereby calling for the integration of effective human resource management strategies to facilitate the realization of a sustainable workforce.

Global Environmental Issues and Energy Use

Important to note, aircraft contributes to environmental degradation through the release of greenhouse gases, as well as particulate substances in the air. The emission of poisonous gases and the release of particles in the atmosphere alter the balance of earth’s radiation besides damaging the ozone layer due to the accumulation of particles in the stratosphere (Peeters, Higham, Kutzner, Cohen, & Gössling, 2016). In this concern, the continued emission of damaging gases such as carbon dioxide because of aircraft flight has the potential of undermining the realization of a sustainable environment.

Surprisingly, the U.S. lacks standards that regulate aircraft exhaust emissions at some given cruising heights, a situation that raises concerns over the damages caused by air transportation facilities on the environment. The lack of scientific information regarding the appropriate altitudes for cruising aircraft without harming the environment from greenhouse emissions is a contributing factor to the absence of aviation standards that seek to manage the issue.

In this light, aviation communities in the U.S. need to carry out extensive research on the development of aircraft that emit fewer greenhouse gases in the environment (Chang et al., 2014). Scientific studies may also identify the altitudes that withstand aircraft emissions. For instance, developing airplanes that travel in the upper troposphere or the lower stratosphere would go a long way in fostering the reduction of the negative effects of aircraft emissions in the atmosphere.

The need for energy efficiency is also crucial in the U.S. aviation sector. Notably, the combustion of fossil fuels used to power aircraft has the potential of triggering significant environmental outcomes (Higham et al., 2016). In this light, energy efficiency is a contemporary issue in the aviation sector, owing to the increased advocacy of the efficient use of energy to boost sustainable development. Besides reducing the detrimental effects of energy inefficiency on the environment, using fossil fuels efficiently in the airline industry is crucial towards cutting operational costs.

Amid the high labor costs incurred by players in the aviation sector, energy use also accounts for a considerable part of the operational costs incurred by carriers. In this respect, there is a need to abandon old aircraft models such as the DC-9 and Boeing 727 to newer fuel-efficient models, for instance, Boeing 737 (Chang et al., 2014). Through the adoption of such models, airline companies in the U.S. will have made considerable strides towards fostering the efficiency of energy consumption. As a result, since 1970, fuel consumption per passenger has seen a 50% reduction, thereby underlining the need for embracing fuel-efficient aircraft models to foster profitability.

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The Fluctuation of Fuel Prices

The fluctuation of fuel prices in the U.S. affects the operational costs of various players in the country’s aviation sector. In the recent past, customers have raised concerns over the increasing costs of travel using air transportation provided by different airliners in the U.S. The additional charges emanate from the increase in fuel prices globally (Treanor, Rogers, Carter, & Simkins, 2014). For this reason, fuel costs account for a considerable proportion of the operational costs incurred by aviation players in the U.S. Furthermore, crude oil prices affect the aircraft stock, thereby influencing the decisions of investors in the sector.

On the other hand, the reduction of fuel prices in the recent years has created a level of uncertainty in the aviation sector. In 2015, airline companies around the globe saved at least $70 billion compared to the case in the previous year (Kristjanpoller & Concha, 2016). The savings allowed companies in the sector to realize significant profits since 2014. In a bid to motivate the workforce, airline companies have entered into agreements that seek to hike the pay offered to employees.

As such, fuel has become the second highest contributor of operating costs among the various aviation companies in the U.S., after labor costs (Kristjanpoller & Concha, 2016). However, the volatility of fuel prices creates uncertainties regarding the sustainability of the labor remuneration packages offered by airline companies. In this regard, an increase in fuel prices in the future is perceived to affect the operations of airliners in the U.S.

The fuel price fluctuation issue in the aviation sector affects the future planning aspect of strategic planning. The upsurge of fuel prices in the future may expose airline operators in the U.S. to financial constraints, owing to the resultant increase in operating costs. The increase in operating costs implies that the contracts sealed during the period of low fuel prices may face constraints that require further financial injections (Kristjanpoller & Concha, 2016). Therefore, the financial burden is a considerable factor that affects the strategic plans of players in the aviation sector.

Conclusion

The area of aviation in the U.S. experiences a range of contemporary issues that affect its sustainability. Transportation congestion and recurrent delays in the sector are major issues that affect the quality of services delivered to customers. Additionally, the adverse effects of aircraft on the environment, as well as energy inefficiency, raise concerns about the efficiency of the sector. Moreover, the volatility of fuel prices creates a level of uncertainty in the aviation industry.

References

Baumgarten, P., Malina, R., & Lange, A. (2014). The impact of hubbing concentration on flight delays within airline networks: An empirical analysis of the U.S. domestic market. Transportation Research Part E: Logistics and Transportation Review, 66, 103-114.

Chang, Y. T., Park, H. S., Jeong, J. B., & Lee, J. W. (2014). Evaluating economic and environmental efficiency of global airlines: A SBM-DEA approach. Transportation Research Part D: Transport and Environment, 27, 46-50.

Kristjanpoller, W. D., & Concha, D. (2016). Impact of fuel price fluctuations on airline stock returns. Applied Energy, 178, 496-504.

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Lonzius, M. C., & Lange, A. (2017). Robust scheduling: An empirical study of its impact on air traffic delays. Transportation Research Part E: Logistics and Transportation Review, 100, 98-114.

Peeters, P., Higham, J., Kutzner, D., Cohen, S., & Gössling, S. (2016). Are technology myths stalling aviation climate policy? Transportation Research Part D: Transport and Environment, 44, 30-42.

Treanor, S. D., Rogers, D. A., Carter, D. A., & Simkins, B. J. (2014). Exposure, hedging, and value: New evidence from the U.S. airline industry. International Review of Financial Analysis, 34, 200-211.

Zilman, C. (2014). Why airlines are running out of pilots. Fortune. Web.

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