Saturday, September 13, 2008

XL Airways and the Cycle of Aviation

The airline business is cyclical, always has been always will be. It's why airlines like Court Line went down in the 70s, Laker in the 80s, Air Europe in 1991… and many others in between.
According to what I've been reading on the web the head of XL believes there are dark forces at work, but since the airline industry was deregulated this is what you get because aircraft manufacturers need to sell more and more aircraft. It causes over capacity, which needs a growing or at the very least a stable-ish market to survive. As soon as things start to turn down then the inevitable happens...airlines and tour operators go bust - those that are vertically integrated are especially vulnerable.

The fact is that forward bookings are now the biggest issue. Airlines have survived the summer because advance bookings were not affected by the loss of confidence coupled with the realities of the credit crunch. This is not now the case; people are not booking travel like they were. Watch over the coming weeks as we start to get a rash of advertising from easyjet, Ryanair et al as they attempt to buy market share.

1 comment:

subalin said...

Nowadays the aviation business has emerged a lot and many commercial flight customers started choosing a Private Jet charter.