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Learn the latest trends in airline industry

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Joined: 12/07/2017 - 4:49pm
Learn the latest trends in airline industry

Let us start by getting one thing straight: the economic performance of the airline industry has seldom been better. There have been record earnings for numerous airlines, particularly thanks to lowered oil prices combined with cost cutting procedures, all of which translate into reduced prices and more customers. Will this keep going into 2018? Who knows. These things are difficult to predict. If rates keep decreasing, then very possibly yes. Through the years research has suggested that in choosing between price and quality, passengers always tip in the direction of price. So airlines have been frankly removing many perks after realising that they don’t convert flyers. Beyond that, mind you, there have been some really critical things going on in this vibrant industry that merit attention and will be analysed in this aviation industry overview. A few of them are sure to astound you and burst preconceived ideas you have about the industry.

Integration is a very standard thing in most industries. A business wants to grow, so it procures a smaller corporation or merges with an equal. In a few industries, consolidation happens as a reaction to a dwindling market in a drive to reduces costs of operations. Mind you, in aviation it seems to be happening right as the market is flourishing at record pace. As a quick reminder on airline industry history, in 1985 there were eighteen major airlines in the United States. Presently, there are only five. Or in another example, Wafic Said - ’s airline was bought out in 2007 by a competitor which was in turn absorbed by a larger competitor in 2012. As far as airline industry trends go, this one is probably here to stay.

One can't look at the future trends in airline industry without taking a look at the growth of low-cost carriers into the long-haul market. Earlier, only legacy carriers offered out such operations, for reasons such as flag carrier privilege, bilateral agreements, and diversified fleets. LCCs, generally managing just one kind of airplane, could reconcile buying long-haul planes with their business strategy. Nevertheless, Bjorn Kjos surmounted these airline industry obstacles and introduced intercontinental flights with his LCC. Competitors were quick to follow, making for a huge disruption in the niche.

Looking at trends in airline industry 2017, what jumps out the most is the obscuring of lines between legacy carriers and low-cost carriers. The airline of Mehmet Tevfik Nane - has layovers at its Turkish hubs, something that was in the past offered only by full-service carriers. Europe’s biggest LCC has freshly revealed that it is introducing connecting routes at one of its hubs, where previously it only carried out point-to-point operations. At the same time, the UK’s flag carrier is eliminating free meals on-board. This is likely among the most astonishing developments in the global airline industry.

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