In the bi-annual survey by Sabre of nearly 80 regional and global airlines worldwide, executives were asked to rank what positively and negatively impacts airline revenue. About 43% of Asia Pacific airlines surveyed identified government regulations as one of the key challenges their airline will face.

Many airlines from around the world are opposed to the recently launched EU Emissions Trading Scheme (ETS), which requires airlines flying into European airspace to pay for carbon emissions.

Sam Gilliland, chairman and chief executive officer of Sabre Airlines Solutions (pictured left) said that as airlines had invested significantly to reduce their carbon emissions, governments should have policies that support this investment rather than impose one-off taxes and compliance schemes.

“Governments would be better placed having more sustainable policies, such as incentives for the research and development of alternative fuels, and adopting policies around NextGen air traffic controls.”

A number of airlines worldwide also face proposed or new airline taxes that could increase the cost of air travel considerably, which may depress travel demand in an already unstable economic environment.

This is the first time that government regulations have ranked in the top three challenges that could negatively impact an airline’s business revenues.

In the past year, airlines and US airport security officials have also come under fire by passengers for increasingly lengthy airport security measures, which also threaten to dampen air travel demand.

Gilliland added that as travel played a critically important role in the global economy, all parties should focus on finding ways to make travel easier and more accessible without compromising security and the industry’s health.

“While some global governments are grappling with how to solve economic problems, they must remember to not bite the hand that feeds them. Airlines are significant contributors to regional and global economies, and making it more costly and difficult to travel will only add to fiscal hardships, not solve them.”

Challenges having the greatest negative impact on airline revenues:

• Fuel prices – 81%

• Government regulations – 72%

• Airport/passenger security – 59%

Fuel price concerns continue to top the Sabre survey with 69% of airline executives surveyed specifically identifying fuel price Instability as the biggest challenge facing airlines. Fuel purchase management and fuel hedging management were most often identified as the primary issues related to fuel price instability.

Challenges having the greatest positive impact on airline revenues:

• Revenue/Yield – 81%

• Customer loyalty and retention – 81%

• IT investment – 76%

Airlines surveyed recognised customer loyalty/retention as important to increasing revenues, but there was a sharp decline over the past two years in the number of airlines that view customer loyalty and retention as a chief challenge for them. This comes in stark contrast to recent consumer surveys conducted by a variety of organisations that have shown complaints about poor airline customer service have significantly increased.

• Click here to download the 2011 Sabre Airline Solutions survey.