The airline industry received a pleasant surprise last month when IATA projected that carriers would return to profit on a global basis in 2010 after a brutal two years...

Although the two events are not related in any physical sense, a synchronicity exists between the shutdown of northern European airspace for six days in mid-April and the proposed merger between United Airlines and Continental Airlines, announced a few weeks later.

Great success stories in commercial aviation are rare even in good times. ATW's Regional Airline of the Year for 2010, Regional Express, is one of those and much more. Remarkably, the Sydney-based carrier has stayed profitable during the worst economic downturn in at least four decades while both rebuilding and expanding a business that was born out of the collapse of Ansett Australia in 2001.

Despite all the advances in airframe durability and engine reliability over the past 50 years that have helped to make air travel the safest form of transportation the world has ever known, one thing has not changed: Bad weather is a threat to be avoided, not confronted. Fortunately, airlines have a weapon in their arsenal that gives them a huge advantage in the never-ending war of wits with Mother Nature--highly advanced weather radar systems.

As the 100th anniversary of the Wright Brothers' first flight was being celebrated in late 2003, it was becoming increasingly clear that aviation's ability to grow and prosper in its second century would depend heavily on mitigating its environmental impact. In particular, the air transport industry was coming under intense scrutiny over its reliance on fossil-based jet fuel, which was seen widely as contributing to global warming. Paradoxically, few foresaw the possibility of developing greener alternative fuels in the near term.

In this most competitive and capricious of industries, and during this most trying of times, staying on top is difficult even for those airlines with entrenched advantages. Simply leveraging a timeless brand, a supportive government, a key hub or sheer size no longer guarantees success, especially when the effort required to innovate increasingly is focused on ensuring survival.

At a time when carriers all over the world are searching urgently for new business models in reaction to the downturn, ATW's Airline of the Year for 2010 has identified and is implementing a multifaceted commercial strategy that is paying dividends today while positioning it for greater success when the recovery arrives. Under CEO Rob Fyfe, it has established itself as a global leader in financial, operational, customer service and environmental performance.

The most acute problems are on Europe's periphery, where many smaller economies are experiencing crises strongly reminiscent of past crises in Latin America and Asia. Latvia is the new Argentina." Thus wrote Paul Krugman, 2008 Nobel Laureate in economics, in The New York Times in December of that year. The Baltic state's GDP contracted 10.5% in the fourth quarter of 2008, the steepest decline in the EU, and plunged an estimated 18% in 2009. Neighboring Estonia and Lithuania were similarly hard hit.