"Airline Recovery?"

Oct 01 2009 "Airline Recovery?" BY admin TAGS Airlines

 

The business press is abuzz the past couple of weeks with glowing predections that the airline slump is ending. Our advice: don't pay a lot of attention to it. The biz press (and its associated analyst) have a notoriously poor understanding of the aviation industry. But I digress...

 

Yesterday American Express Business Travel made this prediction:  "...pent up trip demand coupled with supply base changes are likely to cause rates to slightly increase in most travel categories by the end of 2010. Business class airfares in particular are expected to increase in line with reduced capacity and on-going business demand for international travel."

 

Translation: fares will go up next year.  That's a safe bet.  From the airline perspective, fares have been too low this year; their bleeding red ink.  We've seen several reports the past couple of weeks about the airlines raising their liquidity. They need the cash because they're bleeding it so fast. So, bottom line, fares really have no where to go but up.

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