Jetrader - Spring 2017 - 18

drifting upward. And labor costs are also
potentially set to increase, following the
Delta pilot agreement in late 2016, which
provides for up to 30 percent increases
through 2020, surely a benchmark for
future deals at other airlines. All of which
will mean prices charged to customers will
likely start to drift up as well," Morris wrote,
which has the counter effect of slowing
demand growth.
Currency exchange rates also will influence
individual markets. "The worst market will
therefore be the UK, with a combination of
sterling devaluation both against the dollar
and the euro, together with inflation and currency volatility," Morris wrote. "Since the UK
was a predominantly outbound market, inward
traffic stimulation will not offset outbound
traffic losses, and it is likely European traffic
will be badly hit by the political uncertainty.
Isolationism and air travel growth do not sit
well together."
Isolation and rising fuel prices might
be more complementary, but Mary Ellen
Jones, Pratt & Whitney vice president of
sales for the Americas, said even though
fuel can be volatile, the U.S. has shown it
can be more self-sufficient, which inspires

confidence. "Oil producing companies have
shown that they can rein in their costs and
move along with the going price of oil, so
it seems like there will be a steady supply
for the foreseeable future," she said. "There
doesn't seem to be any panic in the streets
on fuel prices, which is a good thing."
Jones sees aviation as pretty resilient
and the stock market response to Trump as
quite optimistic. "Maybe people are anticipating tax relief, maybe some moderation
of regulations that gives some businesses
some reason for optimism," she said. "At
the same time, the markets don't like uncertainty, and certainly there is some of that
associated with what's to come for the U.S.,
but for now the markets seem to be taking
everything in stride ... so I think aviation
keeps on trucking."
Jones belives a resilient industry and
stock market reassurance adds to that continuing innovation. "We're seeing a lot of
new airplane models coming into service
now - the A350, the Bombardier CSeries,
the A320neo Family, we'll soon have the
MAX in service, the E2 and MRJ, so I think
the new technology coming in also will be a
boon for airline profitability and efficiency,

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The official publication
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for passenger comfort, and that bodes well
for the future of the industry."
Jones sees new technologies and unending investment in technology as reasons for
continued optimism. "Boeing, Airbus are
always trying to look a decade or two ahead as
to what the market will be requiring and what
the competition might have on its mind, so
that's not going to slow down," said Jones,
and will help keep the industry on the right
trajectory, continuing on an upward roll.
OEMs spend billions on the engineering
and development of new technology, and
Jones maintains a positive forecast for the
industry because of a timeless metric: the
phone keeps ringing.
"We here at Pratt & Whitney feel good
about the new products that we are putting out into the market and the demand
for them," Jones says. "There's still good
pull from airlines for new product, as
well as for maintenance coverage on our
existing product, so I think everybody's
very focused on lifecycle costs, which is
the smart thing to do. We're not sitting
around waiting for the phone to ring,
that's for sure. It's very active, very busy,
and that's a good sign."

7/8/16 1:24 PM

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Jetrader - Spring 2017

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