Dave Hilfman, senior vice president of global sales for Continental Airlines, said that while airline companies are facing some of the harshest business conditions, the industry is expected to experience a 5 to 6 percent growth in 2010.
Hilfman said 2009 was a challenging year for the airline industry as a whole. He said airline companies around the world collectively lost an estimated $2.9 billion as a result of the state of the global economy.
However, Hilfman said things will slowly turn around in 2010 as the 5 to 6 percent projected growth will happen in increments.
Lesson
Hilfman, who was the guest speaker at the Guam Chamber of Commerce’s regular meeting at the Marriott Resort and Spa on Monday, said local businesses can learn a lesson or two from the airline industry that has managed to thrive despite tough business conditions.
Although it will still put the airline industry’s revenues 17 percent below the figures from nearly ten years ago, Hilfman said the nine percent increase in revenues expected this year will help keep the industry afloat. The airline industry peaked in 2008, he said, and has never reached that same high since then.
Hilfman said the current economic downturn should not discourage local businesses. The key to surviving harsh business conditions he said is running more efficient operations and revaluating the product currently being offered to customers.
Fuel-efficient
Hilfman said in order to prevent the rising cost of fuel from forcing Continental to have to cut back on flight services, the airline company had to switch to more fuel-efficient planes.
As a result, Continental was able to operate flights nearly 38 percent more fuel-efficient than it did in the past ten years, said Hilfman.
Continental is currently looking at investing in Boeing 787 planes, which would allow the airline company to fly the same routes for less money. Guam could see the new Boeing 787 Dreamliners as early as 2011, he said.
Hilfman also said Continental Airlines re-evaluated the products and services it offered to customers. “We asked customers what they wanted and what they were willing to pay for,” he said.
Services
Hilfman said while Continental has always charged customers one rate for a package deal of the airline’s services, that business model was no longer working.
Continental began to offer different prices for different services, depending on what customers were willing to pay for.
In-flight entertainment and snacks became optional on many flights, Hilfman said.
He told business owners to stay ahead of the game, especially since the island is expected to experience an unprecedented population surge.
The military buildup could be advantageous for local businesses, said Hilfman, but only if business owners realize the importance of re-evaluating their current business model.
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