MAH4546 From Sweden, joined Jan 2001, 31107 posts, RR: 74 Reply 1, posted (5 years 5 months 6 days 11 hours ago) and read 1902 times:
1) You are going to see airlines cut back on point-to-point flying.
2) You are going to see airlines slim down on "focus city" flying (i.e. Delta at LAX; AA at BOS).
3) You are going to see airlines cut down on long haul leisure routes, where high fuel prices combined with the market's price inelasticity are making the routes unprofitable (we have already seen this with Martinair on MCO-AMS, Allegiant on HSV-LAS, Spirit on FLL-ACY, just to name a few).
4) Skybus will make it through the summer, IMO, but not long after that. Ditto with ExpressJet. I think Virgin America, though, will survive. I don't thin Maxjet and Silverjet will make it much into 2008, though, but I have a feeling Eos will survive.
5) 2008 is going to be a major year for dramatic increases in new European services thanks to the war that is about to start on Open Skies. And, for the first time that I can remember, European airlines are now starting to strictly defend their turf and enter into other's territory aggressively. For example, Air France launching Los Angeles-London, British Airways is starting New York City-Paris, and Lufthansa is starting Miami-Dusseldorf.
Spoke2Spoke From United States of America, joined Oct 2004, 190 posts, RR: 0 Reply 2, posted (5 years 5 months 6 days 8 hours ago) and read 1812 times:
Here comes my crystal ball for 2008, focusing mostly on US based carriers.
- Airlines will cut domestic capacity through the 1st and 2nd quarters, restoring some if not all for spring break and then the traditionally heavy summer season.
- International capacity will continue to grow throughout 2008. Look for more routes to the middle east and the orient. Open skies will cause some interesting service additions from overseas carriers, which will cause US operators to scramble to defend profitable turf. Expect US international service levels to continue to improve.
- US airlines will announce new widebody orders, and any domestic aircraft orders will be to replace existing domestic capacity or to add turboprop aircraft.
- Oil will fall to the $60 - $75 a barrel range, which will soften an economic downturn and will bolster travel demand. This will affect the airlines' ability to continue to raise fares.
- We will not see any major consolidation in the US. However foreign airlines will continue to buy stakes in US airlines. We may see a merger of a US carrier and a foreign carrier. However I don't think we'll see a DL/NW or CO/UA size transaction inside our borders.
- LH's move to buy into jetBlue is a real mystery to me. Did not see that coming. Still not expecting to see B6 in star, but heck if LH owns 20%, it may make sense. Look for LH to soon expand their position in B6. Look for BA to follow suit with American, maybe even Air France and Delta or Northwest. Either or all of these could be the 'overseas merger' the crystal ball sees.
- Virgin America will expand and be the new darling of the industry and Wall Street, until they get big and begin to feel growing pains like B6.
- The LCC A32X operators will make noise of a merger of some sorts (jetBlue, Frontier, Virgin America, Skybus) but one won't come together until 2009 or later.
- Look for enhanced airline websites where one can purchase certain seats, amenities, trip insurance. A legacy or 2 will try to charge for any checked baggage service and the media will respond with the usual comments from passenger on how this is ridiculous.
- AA and US pilot contracts will grab headlines and may be quite spirited.
...carelessness and overconfidence are usually far more dangerous than deliberately accepted risks. - Wilbur Wright