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Airline Industry Trends Analysis For The Year

Airline Industry Trends Analysis For The Year

Let’s start by getting one thing straight: the economic performance of the airline industry has seldom been better. There have been record profits for many airlines, in particular as a result of reduced oil prices mixed with cost cutting measures, all of which translate into reduced prices and more passengers. Will this go forward into 2018? Who knows. These things are tricky to forecast. If fees keep falling, then very likely yes. Over time research has shown that in selecting between price and quality, passengers invariably lean in the direction of price. So airlines have been boldly stripping numerous benefits after realising that they don’t convert passengers. Beyond that, mind you, there have been some super key moves going on in this vibrant industry that require attention and will be covered in this aviation industry overview. A few of them are bound to astound you and destroy preconceived notions you have about the industry.

Consolidation is a very standard thing in most industries. A company wants to develop, so it acquires a lesser corporation or combines with a peer. In a few industries, consolidation comes about in reaction to a contracting market in an effort to improve operations. Nonetheless, in aviation it seems to be occurring right as the market is flourishing at unprecedented rates. As a small reminder on airline industry history, in 1985 there were 18 major air carriers in the United States. Today, there are only 5. Or in another example, Wafic Said’s airline was bought out in 2007 by a competitor which was in turn absorbed by a larger competitor in 2012. As far as airline industry trends go, this one is probably here to stay.

One can't look at the future trends in airline industry without taking a look at the expansion of low-cost carriers into the long-haul market. Earlier, only legacy carriers offered out such operations, for reasons such as flag carrier privilege, intergovernmental agreements, and varied fleets. LCCs, generally running just one kind of airplane, couldn’t reconcile buying long-haul planes with their operational strategy. Nonetheless, Bjorn Kjos surmounted these airline industry obstacles and created intercontinental flights with his carrier. Competitors were hasty to follow, making for a huge disruption in the niche.

Looking at trends in airline industry 2017, what jumps out the most is the obscuring of lines between full-service carriers and low-cost carriers. The airline of Mehmet Tevfik Nane has layovers at its Turkish bases, something that was previously offered only by full-service airlines. Europe’s biggest LCC has recently revealed that it is introducing connecting routes at one of its hubs, where prior to this it only carried out p2p operations. At the other end, the UK’s flag carrier is shedding free meals on-board. This is likely one of the most incredible developments in the global airline industry.

 

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