Post-2000 the U.S. “legacy” airlines have incurred enormous financial losses, and four of the six have been through Chapter 11 bankruptcy protection filings—one of them (US Airways) twice. High passenger load factors notwithstanding, there is excess capacity in the U.S. carrier ranks; “excess” in the sense that fares and yields are not high enough for these carriers to generate consistent profits.
Many believe that there needs to be additional consolidation in the U.S. airline industry. There are still five major legacy carriers with domestic route systems of national scope, plus Alaska, and “low-cost” carriers Southwest and AirTran, as well as smaller “niche” carriers.
By George W. Hamlin, Managing Director, Airline Capital Associates
In the June 1 issue of The DAILY, Greg Principato, president of ACI-NA, describes the almost $100 billion investment needed by airports over the next five years. Indeed, investing is the proper terminology because unlike aircraft, "brick and mortar" expenditures for airport facilities cannot be recouped by moving assets to another geographic market if the airport's situation changes.
Currently, Airbus faces the daunting prospect of not only getting the A380 program back on track, which will involve considerable additional investment, but also of meeting the competitive threat posed by Boeing's 787. The latter involves a "revised" A350, resulting in an aircraft that will enter the market several years after the Boeing product, and will require considerable -- and simultaneous -- development spending of its own.
The U.S. and European Union are at loggerheads over a pair of aerospace and aviation issues--namely the rival World Trade Organization suits (and associated negotiations) brought by Airbus and Boeing, and the thus-far unsuccessful attempts at negotiating an open skies agreement for air service between the U.S. and EU countries.
Ordinarily, these two items probably wouldnít warrant mention together; however, the juxtaposition of Southwestís last 737-200 flight and the ìrevealî of the Airbus A380 happened to occur one day apart, on Jan. 17 and 18, respectively. Furthermore, both were celebratory affairs, one literally on a global scale, the other a little more down-home.
In a recent "Arrivals," column (DAILY, June 2), Eclat consultant Leslie Riegle is quoted as saying, "Congested airports must find ways for airlines to exchange frequency for increased seating capacity." The analysis cites increased regional jet usage as a principal culprit for increased congestion, and states that "...airports have become less efficient, handling the same number of passengers with a greater number of frequencies."
Since the advent of the Boeing 747 30 years ago, there has been great concern about large aircraft. The discussion continues today, in the form of Airbus's advocacy of a near-term market need for its A3XX, against Boeing's contention that the need is considerably later than forecast by the European consortium.
However, the other end of the "large" jet range may have a greater impact in the near term, particularly in more mature markets.
This advert appeared in Aviation Week & Space Technology a little over eight years after the iconic Dart engine powered the maiden flight of the prototype Viscount. The engine helped make the Vickers Viscount one of Britain's best-selling aircraft....More