2008 has been a really interesting year for aviation. If we look at the airlines we see many airlines on the verge of bankruptcy and several different strategies to deal with this. Some are looking to raise airline fares and add in extra fees for nearly every possible extra they can think of, and this is having an adverse effect on customer loyalty and satisfaction. Other airlines are looking to consolidate and merge with rivals; some are adding fees and looking to merge. It's a free for all.
Then in the airline manufacturing industry we have Boeing vs. Airbus. Boeing has bet on new carbon composite aircraft making them lighter and thus much more efficient, while their arch enemy and market rival Airbus is going for the world's largest aircraft so they can carry more passengers on a single flight thus, cutting the cost per passenger. Both strategies seem to be working as orders for the A380 Airbus and 787 are strong.
The discount airlines are doing okay, but no airline these days can claim to be break the sound barrier. The fuel costs are prohibitive and even if all the airlines raise fares, there is a ticket price where much of the flying public will just stop flying. And this can be seen as many airlines are retiring their less efficient aircraft and thus, taking capacity out of the market. The supply and number of airliners is being reduced out of prudent business decisions to cut non-profitable routes.
Richard Branson of Virgin Airways recently stated that this would be an ugly year for the Airlines and we might see a major carrier file bankruptcy, perhaps several. The Online Think Tank agrees with this and believes some carriers may hold out until 2009 or 2010, but the shakeup in the industry will continue and major bankruptcy announcements are indeed forthcoming.
