Surprise: airline expert says dinosaurs will survive
Most of the seven or so major US airlines will survive, predicts David Field, Airline Business Magazine Americas Editor and a former aviation writer for major publications such as USAToday. “You have to keep in mind, in terms of the political infrastructure, when you lend people money, you want them to survive. The more airlines are mortgaged, the more parties are there who believe they will survive,” he told TravelMole. The major airlines will probably change, however, with a lot of mergers, added Mr Field. His comments were a preview of his keynote address scheduled for 1 April at the UATP Airline Distribution Conference in San Francisco. Airlines that Mr Field does not think will make it in their present structure include US Airways. But he adds the airline may be saved through a possible merger or acquisition. The airlines in the best shape, he said, are Northwest and Continental. “They have a fair amount of cash and they don’t have as much as a legacy of bad labor relations as the others,” he said. He predicted American would also do all right in the future. “They’ve done all sorts of the right things in terms of changes made in one year. Bear in mind that American has operating costs similar to Continental, which is very low,” he said. Mr Field predicts the low-cost airlines will continue to do well, but that they will not be inclined to merge because so many are run by independent-minded owners. He also predicts that the biggest area for future expansion for the large US airlines will be the international market. “American, United and Delta will be looking at Latin America and Asia. There’s a lot of growth and a lot of demand there. Asia, led by China, is a huge growth market, and there’s plenty of demand in Latin America,” he said. He said the appearance of major airlines announcing new US routes is somewhat misleading. “They’re often only adding back to what they had before. We’re still 20% or so below where we used to be,” he said. Mr Field said he personally feels safer with the crackdown on airline security. “But I don’t know if that’s so much the Homeland Security Office, but the airlines, which have become more security-conscious. Passengers have also become more security-conscious,” he said. Terrorism is not the biggest threat to the health of the airlines, he believes. Instead, it’s the rising oil prices that threaten to severely cut back on industry profits.
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