The global aviation value chain is made up of a diverse set of sectors that differ in size, structure, and financial performance. Some sectors generate significant profits while others may struggle to maintain profitability. They also differ in the value they create from an investor’s perspective.
Since 2005, McKinsey and IATA have jointly looked at value creation across the aviation value chain to understand what drives performance, and to inform the debate about how to enhance value creation and efficiency across the entire chain.
The focus of this ongoing research is economic value creation, defined as the difference between the return on invested capital (ROIC) and the weighted average cost of capital (WACC). In essence, ROIC…