Airlines - The Future
With all of the expansion that has been happening and is planned by airlines, one has to ask themselves just how long can this continue? The economy and thus, the way airlines perform have their peaks and troughs. At the moment we are approaching the peak in both. Next year, I believe that the economy will slow. We are starting to see higher interest rates, increased fuel costs and inflation is rising ie. a higher cost of living. With this naturally comes reduced spending powers. How far this will go is anyone's guess. However, in a worst case scenario, it will be both Jetstar and Tiger that will suffer more as a lot of their clientel are those who have never ventured further than a five kilometre radius of the nearest centre link office or those with a tight budget. Discretionary spending by business will decline and Qantas and Virgin Blue will suffer to a degree. The BIG question though is fuel prices. Just how much can airlines - or more to the point, the consumer, sustain increased fuel costs before something gives?
The airlines also complain about lack of pilots yet anyone with the ability to become one these days realises that it is not the viable option that it once was. Son number one, who has a private licence, has decided to pursue a trade (electrician). He sad, "Dad I'll be able to earn more than a pilot, be home every night and not have to be subjected to checks and medical requirements." Airlines should not be charging for endorsements. Maybe they could attract more candidates? How much will the pilot shortage impact on the economy? Cancelled flights and reduced tourism - lost revenue. Certainly pilots pay for their initial training as do other professionals such as lawyers and doctors but it really is a bit rich for an employer to expect an employee to fork out tens of thousands of dollars to work for them. Until airlines lift their conditions there will be a shortage.
I feel that within five years time, the industry will stagnate. The major reason will be the cost of fuel and there will be quite high environmental taxes charged on airline tickets further dissuading air travel.