The whole thing starts here...
http://www.meeting-the-future.com/doc/ForeviewNews9MTF.doc
Click Future of the airline industry to go to
http://www.foreview.com/cgi-bin/hv/!session.3fd21c443fd2bdcb/magazine/2002_03_01/industries.shtml
Predictions
The general downturn of the economy and impact of September 11 has eroded the yields of most airlines who will go through a very difficult period over the next few years. Airlines have parked their least efficient aircraft and reduced schedules by an average of 15-20% although peak period schedules remain at pre-September 11 levels. Load factors have recovered but the average fares are significantly reduced.
The system will slowly adapt to new security requirements although this will be a difficult transition. Security related delays and interruptions will compete with weather as a key cause of schedule disruption. Passenger frustration due to security inefficiencies will increase.
Efficient security procedures will become a service quality element however the airline control of security procedures will decrease with the transition to federal security procedures.
Airport and Airspace Capacity restrictions will re-emerge as an issue in the summer of 2002. The delays will increase and the public will become more dissatisfied. It is likely that some sort of demand management will be put in place at highly loaded airports.
The Alliance and Merger trend will subside in pace but there will still be competition to develop very broad "super networks". Difficulties in interfaces between alliance partners will continue to be a problem sometimes resulting in realignments of alliances.
Cost pressures will continue to rise (Fuel, Labor, Aircraft, Facilities, Fees). Airlines will not be able to cover these costs internally or by increasing load factors which are near the maximum tolerable level. Consequently the period of decreasing real costs in air travel which began with deregulation in the US will come to an end and costs to consumers will rise. Low cost and new entrant carriers will have a short term advantage in this environment.
Environmental factors will become more important. Noise issues around airports will be a cost issue. Stage 4 noise requirements will be imposed resulting in the obsolescence of some aircraft in the fleet. Emissions will be issues for local air quality near airports and for high altitude emissions impact on the Ozone layer and greenhouse gas emission.
Labor costs will rise with continued pattern bargaining.
Electronic distribution of tickets will become dominant. Travel agents will evolve to provide other value added services. They will have to find places where they will add value. For complex travel or some international travel, they will continue to be important and people will pay the additional fees that travel agents will charge. Some will develop and sell specific expertise essentially as consultants. Others will get into packaging (i.e. adventure tours, travel and entertainment, etc.). Finally others will perish.
Airfreight will continue to increase at roughly twice the rate of passenger traffic.
The Airbus A380 will have little impact on the Airline industry. If the Boeing high speed aircraft is successful it will cause a major realignment in product offerings
Regional Jets will continue to grow in percentage. The average aircraft size will continue to go down in domestic markets.
Service will increase to secondary airports around high-density markets.
More of the high end of the market will shift to corporate aircraft as scheduled service becomes more delayed and corporate aircraft are more cost effective due to fractional ownership.
Regulation will increase. There will be pressure in the US to enact service quality regulations ('passenger bill of rights"). Environmental and safety regulations will grow.
Ownership and control will be one of the main deregulatory controversies in coming years. How the matter falls out will depend on the relationship between the EU and the USA. The USA will not change its law and the most likely scenario is a general fudging of the issue to allow some incremental move forward under the guise of a miscalled CTAA to facilitate commercial operations by each side's airlines. This might be an acceptable modus operandi in the short-term, but a recession in the fortunes of the industry would bring difficulties to the surface and could create a major economic crisis between the USA and the EU. All this will be further complicated if member states of the EU do not relinquish state ownership of airlines.
Consolidation will become a major issue in both the US domestic and international system for the US and non-US constituencies respectively. The present US Administration will not rein in US airlines through improvements in the regulatory framework and there will thus be a growing divergence between the US and countries such as Japan and the EU on regulation and fair competition.
Likely developments in both ownership and control and consolidation will fuel the differences in regulatory culture within the USA on the one hand and in Japan and the EU on the other. Fears of predatory competition and an American empire of the skies, along with growing protest at capitalist globalization (or at least at its more unacceptable demeanour) and concern about pollution will rekindle the debate about regulation and exacerbate the tensions between what is now the dominant ethos in the USA and a different ethos in other influential and important parts of the world.
The airlines will have a major public relations problem with criticism from the environmentalist lobby and the anti-globalization protest movement.
http://www.meeting-the-future.com/doc/ForeviewNews9MTF.doc
Click Future of the airline industry to go to
http://www.foreview.com/cgi-bin/hv/!session.3fd21c443fd2bdcb/magazine/2002_03_01/industries.shtml
Predictions
The general downturn of the economy and impact of September 11 has eroded the yields of most airlines who will go through a very difficult period over the next few years. Airlines have parked their least efficient aircraft and reduced schedules by an average of 15-20% although peak period schedules remain at pre-September 11 levels. Load factors have recovered but the average fares are significantly reduced.
The system will slowly adapt to new security requirements although this will be a difficult transition. Security related delays and interruptions will compete with weather as a key cause of schedule disruption. Passenger frustration due to security inefficiencies will increase.
Efficient security procedures will become a service quality element however the airline control of security procedures will decrease with the transition to federal security procedures.
Airport and Airspace Capacity restrictions will re-emerge as an issue in the summer of 2002. The delays will increase and the public will become more dissatisfied. It is likely that some sort of demand management will be put in place at highly loaded airports.
The Alliance and Merger trend will subside in pace but there will still be competition to develop very broad "super networks". Difficulties in interfaces between alliance partners will continue to be a problem sometimes resulting in realignments of alliances.
Cost pressures will continue to rise (Fuel, Labor, Aircraft, Facilities, Fees). Airlines will not be able to cover these costs internally or by increasing load factors which are near the maximum tolerable level. Consequently the period of decreasing real costs in air travel which began with deregulation in the US will come to an end and costs to consumers will rise. Low cost and new entrant carriers will have a short term advantage in this environment.
Environmental factors will become more important. Noise issues around airports will be a cost issue. Stage 4 noise requirements will be imposed resulting in the obsolescence of some aircraft in the fleet. Emissions will be issues for local air quality near airports and for high altitude emissions impact on the Ozone layer and greenhouse gas emission.
Labor costs will rise with continued pattern bargaining.
Electronic distribution of tickets will become dominant. Travel agents will evolve to provide other value added services. They will have to find places where they will add value. For complex travel or some international travel, they will continue to be important and people will pay the additional fees that travel agents will charge. Some will develop and sell specific expertise essentially as consultants. Others will get into packaging (i.e. adventure tours, travel and entertainment, etc.). Finally others will perish.
Airfreight will continue to increase at roughly twice the rate of passenger traffic.
The Airbus A380 will have little impact on the Airline industry. If the Boeing high speed aircraft is successful it will cause a major realignment in product offerings
Regional Jets will continue to grow in percentage. The average aircraft size will continue to go down in domestic markets.
Service will increase to secondary airports around high-density markets.
More of the high end of the market will shift to corporate aircraft as scheduled service becomes more delayed and corporate aircraft are more cost effective due to fractional ownership.
Regulation will increase. There will be pressure in the US to enact service quality regulations ('passenger bill of rights"). Environmental and safety regulations will grow.
Ownership and control will be one of the main deregulatory controversies in coming years. How the matter falls out will depend on the relationship between the EU and the USA. The USA will not change its law and the most likely scenario is a general fudging of the issue to allow some incremental move forward under the guise of a miscalled CTAA to facilitate commercial operations by each side's airlines. This might be an acceptable modus operandi in the short-term, but a recession in the fortunes of the industry would bring difficulties to the surface and could create a major economic crisis between the USA and the EU. All this will be further complicated if member states of the EU do not relinquish state ownership of airlines.
Consolidation will become a major issue in both the US domestic and international system for the US and non-US constituencies respectively. The present US Administration will not rein in US airlines through improvements in the regulatory framework and there will thus be a growing divergence between the US and countries such as Japan and the EU on regulation and fair competition.
Likely developments in both ownership and control and consolidation will fuel the differences in regulatory culture within the USA on the one hand and in Japan and the EU on the other. Fears of predatory competition and an American empire of the skies, along with growing protest at capitalist globalization (or at least at its more unacceptable demeanour) and concern about pollution will rekindle the debate about regulation and exacerbate the tensions between what is now the dominant ethos in the USA and a different ethos in other influential and important parts of the world.
The airlines will have a major public relations problem with criticism from the environmentalist lobby and the anti-globalization protest movement.
