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Homework answers / question archive / List and briefly describe the major factors affecting commercial transport sales

List and briefly describe the major factors affecting commercial transport sales

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List and briefly describe the major factors affecting commercial transport sales. How does the cyclical nature of civil aviation affect aircraft manufacturing?

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Answer:

Factors affecting commercial transport sales

  • • Economic growth: broadly influence demand for air transport because more people and business travel
  • • Inflation: high inflation hinder investment and financing, as well as economic growth. Airlines facing higher cost and have to increase fare
  • Fleet capacity: Passenger load factor keeps a constant level after a period of decline in the early 2000s
  • • Replacement Aircraft: Airlines have to replace their old aircrafts and upgrade to better ones periodically.
  • • Airline profitability: in order to rasie capital, airlines needs to prove investors that they are profitable.
  • • A cyclical industry: civil aviation market are generating in cycles of peaking and declining. Because aircraft are expensive to build, they are only made after the order is placed, which create a lag

time. → aircrafts and airlines can miss a market peak time due to manufacturing lag time

  • • Future trend in air transport: Transport deliveries are rising in the future as international economy grow.