Of course, the biggest problem in a cyclical industry such as ours is that we tend to bury our heads in the sand somewhat and hope that we won't be b*ggered again - but invariably we are.
At the top of the cycle, airlines are going great guns and ordering aircraft left, right and centre - resulting in long delivery times. Crews are demanding astronomical pay increases - after all, there's a pilot shortage and the airlines are making good profits, so they can afford it!
As the downturn starts, their shiny new aircraft are starting to be delivered - and they realise that they haven't got the pax to fill them, so they end up being parked in the desert as part of a 'restructuring' programme. At the bottom of the cycle, airlines which have financed their aircraft are in the weakest position, as they can't simply hand them back to lessors (albeit with serious penalties) and their high overheads in the form of finance costs and high salary costs cause them to fail. At the same time, other carriers are dumping their older aircraft in the desert as fast as they can and selling them off to anyone that will take them - at pennies on the dollar.
They are snapped up by new, low-cost entrants, who get them on 'sweetheart' deals from banks that want to realise something - anything! - on their investments, rather than have them sit in Marana, Mojave, Las Vegas or Victorville. Getting good crews and other experienced staff at low salaries is no problem for these new entrants; with so many failures, the job market is saturated - usually with those people that a few short years previously had been boasting about their high pay.
As the economy improves, so these low cost carriers will often overexpand and end up with serious management and operational problems (such as ValuJet); or they will themselves evolve into 'full service' carriers - such as America West did in one of its earlier incarnations - losing all the benefits and focus that it had in the process.
Crews at the low cost carriers will tend to move to the more traditional operators as they re-equip themselves, opening up new vacancies... and the cycle goes on.
Lessons to be learnt by anyone wanting to stay in business include:
1) Don't buy new aircraft at the top of the cycle - in fact, the best way is to lease in older - but far cheaper - aircraft;
2) Don't bow to high pay demands from staff - rather make it a profit share arrangement;
3) Keep overhead to a minimum at all times - let 'lean and mean' be your watchwords;
4) Retain as much cash as possible to pick up those firesale bargains!
All very logical really - but let's look back two years from now and see who actually didn't take any notice of them!
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Happiness is a warm L1011