100,000 aviation jobs will be slashed as fuel prices and the economic slump accelerate industry consolidation on a massive scale, according to Qantas boss Geoff Dixon.

The chief executive officer, making some wide ranging predictions about the aviation industry in a recent paper, said that the fuel crisis would be the catalyst for a seismic shift that would see the market populated by a few huge highly efficient global airlines, niche carriers that served individual markets and wealthy flag carriers from the oil nations.

Describing a “new world order”, Dixon said: “Over time, consolidation will transform aviation. It will produce a few, very large and extremely efficient global airlines with a portfolio of interests and brands - like Air France and KLM. These players will have enormous power in marketing, in fuel buying and hedging, in aircraft purchasing, and in reach. There will still be niche airlines with specialist offerings - whether for business or leisure travellers - but these will need to be run very skilfully, and any weakness will lead to a quick death. And there will also remain those powerful, government-backed airlines, particularly from the oil rich states. These governments will continue to use aviation services as instruments of national economic development.”

Dixon also revealed his optimism about March’s EU-US open skies agreement, saying “everyone was watching” the second stage talks regarding investment liberalisation, adding that the US “may at last be prepared to accept airlines from Europe - and potentially other countries - based on their ‘principal place of business’ rather than their ownership”.

Dixon predicts that by 2020 “many more” airlines will disappear because they won’t be able to deal with the “permanently high” fuel costs or they will be taken over by the bigger players.

By Dinah Hatch