Tuesday, January 06, 2009

The Airline Industry - IATA style - Times Interview with CEO Giovanni Bisignani

I have come across an interview in the TimesOnline by Suzy Jagger with IATA CEO Giovanni Bisignani. The article is a great piece of PR for Bisignani but if you can read through the "talking points", the text contains some interesting predictions and comments from him about the year ahead for airlines. Here are a couple of them:
  • Bisignani believes that the current environment is significantly worse that anything he has seen in the last 60 years including 9/11 which "had a very limited impact";
  • While the US has already cut capacity by 10% (he expects this to rise to 12%) there have been limited cuts so far in Europe. This will hurt the Euro carriers significantly as they are carrying too much capacity and have been for too long. Bisignani is predicting that Euro carries will lose €1billion in 2009. He singles out Alitalia and BMI as being the airlines most likely to be worst-hit;
  • Airlines are going to be working hard to wiggle out of orders with Boeing and Airbus as the capacity cuts have resulted in more tha 760 airlines being parked somewhere gathering dust.
Backs up my predictions from yesterday including that I expect to see another big airline fail this year (other than Alitalia).

4 comments:

Anonymous said...

i think passangers and people movement will be dictated by currency fluxuations rather than bargins andfuel prices.

Have we all become older and smarter or better shoppers ?

Tim Hughes said...

@Anon - there is definitely a greater than usual impact for currency changes on travel behaviours. The Euro vs the Pound. The Yen v the Aussie D. The challenge is that the fluctuation itself brings uncertainty. I have anecdotal examples of people booking trips 3 months out at one exchange rate then having to cancel just before departure as the change in the rate made the destination costs unaffordable.

Anonymous said...

Tim - what's your prediction on the impact of Delta flying from LAX to Sydney in 2009?

Tim Hughes said...

@Anon - the good news is that it means more capacity and therefore reductions in prices. The bad news is that the Delta product (like the United product) is not in the same league as Qantas and the airlines I want to be allowed on the route (Emirates and Singapore). Good story here on Cranky Flier if you want some more details.