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Will Airlines Restore Capacity 100% Eventually?  
User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9168 posts, RR: 15
Posted (5 years 3 weeks 3 days 20 hours ago) and read 2236 times:

Will airlines restore capacity 100% eventually? I mean back to pre-9/2008 level. Wonder when will this take place..........

I mean for UA, CX, SQ etc.

13 replies: All unread, jump to last
 
User currently offlineInnocuousFox From United States of America, joined Dec 2003, 2805 posts, RR: 14
Reply 1, posted (5 years 3 weeks 3 days 16 hours ago) and read 2143 times:

I really think you have to ask the question... "what is 100%?" Capacity and demand are constantly fluctuating based on many factors. 100% capacity is, theoretically, what the market needs it to be at any one time.


Dave Mark - Intrinsic Algorithm - Reducing the world to mathematical equations!
User currently offlineKhobar From United States of America, joined Mar 2006, 2379 posts, RR: 4
Reply 2, posted (5 years 3 weeks 3 days 15 hours ago) and read 2110 times:

Many airlines have a chance of growing once the current economic issues are over with. However, many other airlines - the ones that insist on looking to the bus industry for their future passengers - well, for them it's a matter of time before they crash and burn.

User currently offlineEBGARN From Sweden, joined Jan 2008, 226 posts, RR: 0
Reply 3, posted (5 years 3 weeks 3 days 15 hours ago) and read 2050 times:

No doubt, yes!

The headlines like "The Champagne era is over" and "Businesses have changed forever" were seen in the early nineties, and in 2001-2003. Still, just a few years down the road, all the doom & gloom is forgotten and we are back in the fast lane. Thinking the good times will never end... Again! But of course it does!  Smile

So, for the airline industry, I guess we might be back in the 2007 passenger numbers by 2012-2013, seeing another order-frenzy 2014-2015.

2016-2017? Well, by then we might be back just above the levels of 2009...



A306,A319/20/21,A332/3,A343/6,A380,B717,B727,B737,B744,B752/3,B763,B772/3/W,C-130,AN26,CRJ900,Il62,DC-8/9/10,MD80's,BaeR
User currently offlineFrmrCAPCADET From United States of America, joined May 2008, 1714 posts, RR: 1
Reply 4, posted (5 years 3 weeks 3 days 13 hours ago) and read 1953 times:

As oil prices go up, travel will go down


Buffet: the airline business...has eaten up capital...like..no other (business)
User currently offlineAADC10 From United States of America, joined Nov 2004, 2088 posts, RR: 0
Reply 5, posted (5 years 3 weeks 3 days 12 hours ago) and read 1917 times:

Capacity will eventually return to its previous peak if only through normal population and economic growth, unless some other form of transportation emerges to take its place. The real question is how long will it take? I would guess around ten years.

Airlines have been in a boom/bust cycle throughout the history of the business, often ordering aircraft and building terminals just in time for the bust. There is no real reason to think that they will not increase capacity again when the economy recovers.


User currently offlineN757st From United States of America, joined Feb 2002, 360 posts, RR: 0
Reply 6, posted (5 years 3 weeks 3 days 12 hours ago) and read 1863 times:

10 years? Maybe at United. As far as the other airlines go. CAL will be there by the end of 2010 just due to aircraft orders, LCC likely around the same time. AMR and DAL, who knows, but I would not be surprised to see DAL pull an AMR in the next decade and slowly shrink the place a bit. UAL? Maybe never, with the loss of the entire 737 fleet they would have to do a heck of a lot of expansion to replace all that capacity. SWA will start growing when the economy picks up next year, Jet Blue the same. These cycles usually happen in the span of 10 years, so if so here is what I can see happen.

2010-2012 Airlines slowly add back capacity, start to rebuild cash
2012-2015 Airlines get large orders together and start to grow
2015-2017 Airlines get larger and larger, wheel and deal, and overpopulate the airports
2018-2019 Recession hits, airlines pull back, everyone says LCC and UAL will go out of buisness (they of course don't) and everyone scales back.
2020-2030 Wash and repeat


User currently offlineChase From United States of America, joined Nov 2005, 1054 posts, RR: 0
Reply 7, posted (5 years 3 weeks 3 days 11 hours ago) and read 1809 times:

We can be sure of a few things:
1) Oil prices will go up
2) The cycle of booms and recessions will continue
3) The population will keep growing, and at an accelerating rate.

I think #3 is the biggest factor - when the population is triple what it is today, in a hundred years or whatever, it just won't be feasible for there to only be today's number of flights.


User currently offlineFrmrCAPCADET From United States of America, joined May 2008, 1714 posts, RR: 1
Reply 8, posted (5 years 3 weeks 3 days 9 hours ago) and read 1725 times:



Quoting Chase (Reply 7):
I think #3 is the biggest factor - when the population is triple what it is today, in a hundred years or whatever, it just won't be feasible for there to only be today's number of flights.

Right now best estimates are 50% growth or less over the next 50 years, or 9 billion people. Most of those will be in poverty stricken areas of the world. They may not add much to world travel.



Buffet: the airline business...has eaten up capital...like..no other (business)
User currently offlineEtoile From United States of America, joined Jun 2009, 114 posts, RR: 0
Reply 9, posted (5 years 3 weeks 3 days 9 hours ago) and read 1715 times:

I can confidently predict that airline capacity overall, and for CX and SQ, will someday exceed 100% of capacity as of 9/2008. As for UA, it depends on how you compare the capacity resulting from any corporate merger or other reorganization to the 9/2008 base.

User currently offlineOlympic472 From United States of America, joined Jun 2008, 456 posts, RR: 0
Reply 10, posted (5 years 3 weeks 3 days 5 hours ago) and read 1606 times:

Only in the long term, and my guess 2014 /2015.

In the near term I think the airline industry have to depend on essential business travels.
Hopefully the leisure market can keep the planes filled, including the conventions and conferences business (despite the beating this sector took from the politicians).

My take on the three carriers referred to above:
UA is quite conservative. They are quite lean so they should not be too concern with filling excess seats. What aircraft they order and the timing will be insightful.
CX will be the first out of the gate. A free and vibrant economy plus having south China at its backyard.
SQ will be ready with all their equipment in hand, but they need to fill all those seats.



Civil Aviation has a "Need for Speed"!
User currently offlineCubsrule From United States of America, joined May 2004, 22924 posts, RR: 20
Reply 11, posted (5 years 3 weeks 3 days 5 hours ago) and read 1570 times:



Quoting AADC10 (Reply 5):
Capacity will eventually return to its previous peak if only through normal population and economic growth, unless some other form of transportation emerges to take its place.

I think it's important to consider two things separately:

1) Overall capacity, which probably will, at some point, return to its peak levels

2) Capacity on individual routes or by individual carriers, which is a much harder question. Let's take an extreme example:

Say Wal-Mart files Chapter 11 and is acquired by Target, who moves headquarters to Minneapolis. In such a scenario, service at XNA surely would NOT return to its peak levels. That's an extreme example, but it will play out to a smaller degree around the world, and will do so regardless of what the economy writ large does.

More generally if, for instance, the California economy is slow to recover, that makes it less likely that UA will return to its previous capacity level since two of its five hubs are in California.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineSancho99504 From United States of America, joined Dec 2005, 570 posts, RR: 0
Reply 12, posted (5 years 3 weeks 3 days 4 hours ago) and read 1554 times:

This post may get deleted but here goes.

Quoting AADC10 (Reply 5):
Capacity will eventually return to its previous peak if only through normal population and economic growth

I don't think the economic growth in the US will be as large as has been in the past. The reason I say this is because of the track environmentalists are on, mainly the EPA and the Obama Administration. I don't think economic growth in booming levels is achievable.



kill 'em all and let God sort 'em out-USMC
User currently offlineMMEPHX From , joined Dec 1969, posts, RR:
Reply 13, posted (5 years 3 weeks 3 days 3 hours ago) and read 1481 times:

if the airlines have any sense (and they generally don't seem to think all that rationally) then capacity RELATIVE to the available passenger demand should probably never return to the pre-crash levels. There was too much capacity chasing too few people who were prepared to pay the true cost. Of course natural population growth will one day see the actual number of seats exceed those offered at the height of the past boom but this may be at an overall ratio of seats per head of population than the pre economic crash days.

Of course what will really happen is that as soon as there is an inkling of an upturn in the economy airlines will throw 4 RJs an hour on a route, clog up the runways and ATC system, then wonder why they are all delayed, and jack up the air fares again (but all the extra bag/snack/drink/blanket etc. fees will mysteriously remain). 3-5 years later the whole thing will go bang again and we'll be back to where we are today.


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