Lower house prices = LOWER CONSUMER CONFIDENCE (tied in with the "wealth effect"?) = Less willingness to spend/borrow = less money spent on weekend breaks/holidays = less airtravel = less demand for pilots etc etc.
It isn't really that hard to understand is it??
Also for the likes of the legacy airlines most of the profitability comes form business class travel. Anyone working in a large corporate can tell you that getting those expensive business class flights signed off is becoming tougher and tougher.
I would love to be upbeat but to be frank I think it will get worse before it gets better. So much so that I am ditching the good ol' UK and relocating to the Middle East for 2-3 years this weekend! Wooohoo sun and sand here I come..... don't think I will miss much here.. I would put money on house prices being at least 10% lower in 3 years time in both nominal and real terms.