Introduction
The aviation industry has no ancient roots, yet it is a well-established part of the market with multiple subdivisions. According to Revfine (2021), “the aviation industry … includes aircraft manufacturers, researchers, air safety specialists, businesses involved with military aviation and, increasingly, companies that design, produce and/or make use of drones” (para. 4). Besides, the airlines are also a part of the industry, which means that cargo shipping and travel services related to the aviation as well. Mordor Intelligence (n.d.) declares that “the aviation market was valued at USD 169.72 billion” by the present moment, which is a significant amount regarding the industry’s market share (para. 1). In the paper, the economic and political environments of the aviation market are discussed.
The Economic and Political Environments of the Aviation Market
The critical issue that has impacted the industry in the last few years is undoubtedly the pandemic. The companies experienced an economic crisis because of the limitations for trade and transportation of people. For example, airline companies resorted to governmental aid, taking credit for supporting their businesses. In turn, states have received a way to influence the industry, which is a new political trend (Bouwer et al., 2021). As for the economic environment, “the most recent estimates suggest that demand for air transport will increase by an average of 4.3% per annum over the next 20 years” (ICAO, n.d.-b, para. 16). This means that growth is expected in the industry; the other economic trends are the rise of job positions in the market and greater emphasis on tourism-purposed market strategies (ICAO, n.d.-a). Thus, although COVID-19 slowed down the development of the aviation industry, it is still promising nowadays.
The existence of governmental support is a significant trend that converges with the rise of tourism’s influence on the market. Namely, traveling and trade have become even more global than earlier, and the economic environment pushes the aviation industry for further expansion. At the same time, state-provided aid obliges the companies to cooperate with the government. These two trends converge: the governments might be more encouraged to promote new possibilities for aviation if they had invested in the industry.
The most critical trend among those enumerated might be a tourism-orientated economy in aviation. Specifically, tourism gives rise to economic development in countries where the technological level has not yet reached that of the most prosperous countries (ATAG, n.d.). The reason for this is the emphasis on services rather than products; services are innumerable and do not depend on natural resources. Moreover, this approach provides intercultural cooperation and generates the global market with the most considerable potential customer amount.
It can be proposed that the mentioned trend will impact the aviation industry in a significant way over the next five years. First of all, one can expect that private aircraft would be designed for tourist purposes. Then, the services of the engineers and pilots would gain more popularity. Furthermore, more cooperation with local tourist organizations can orient the strategies of aviation companies onto marketing-based techniques for gaining more consumers.
Conclusion
To conclude, the aviation industry is a high-developed sector of the global economy that expects further growth in the international market. Although governments can exert more control in the airline’s subsector, the aircraft can gain much-needed support for promoting international businesses. Finally, the tourism trend will impact the industry so that it can become more customer-friendly and involve more specialists that can maintain the satisfaction of the rising demands for traveling.
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References
ATAG. (n.d.). Tourism enabler. Web.
Bouwer, J., Saxon, S., & Wittkamp, N. (2021). Back to the future? Airline sector poised for change post-COVID-19. McKinsey & Company. Web.
ICAO. (n.d.-a). Economic impacts of COVID-19 on civil aviation. Web.
ICAO. (n.d.-b). Future of aviation. Web.
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Mordor Intelligence. (n.d.). Aviation Market. Web.
Revfine. (2021, March 30). Aviation industry: All you need to know about the aviation sector. Web.