028-31_TTGB air feature 5/11/08 13:18 Page 29
airlines 29
Realigning
the skies
The perfect storm that battered the airline sector has
lifted, with oil prices dipping below $70 a barrel. But
with the UK now teetering on the brink of recession,
Martin Ferguson examines what the inevitable changes
in the skies might mean for the business travel industry
continues to circle fellow Irish carrier Aer Lingus while
Flybe says it is “actively seeking to acquire”.
So while the jockeying for position intensifies, it remains
unclear what effect these inevitable changes will have on
the business travel industry. A recent survey released by
American Express Business Travel claimed air fares could
increase by up to 9% next year.
This year’s fuel prices will undoubtedly lead to
consolidation in the global airline industry, according to
Michael Hare, commercial director of London-based
travel management company Portman Travel, and chair of
the Guild of Travel Management Companies air working
party. However, he is adamant that healthy levels of
competition will be maintained.
“We’ll see a real reduction in capacity,” he says. “As a
result there will be a decrease, or a total removal, of Hare’s prediction is well founded, as both BA and
below-cost lead fares in the market. These seats have, Lufthansa have made strides into the lucrative high
until now, been sold to fill excess capacity, primarily in yielding all-business class market in the last year. Recent
the leisure market. But from here on I believe airlines reports have suggested BA is even considering pulling
will focus their competitiveness on service and product underperforming low-volume services, and transferring
as their full attention is turned to the higher-yielding aircraft on to the more rewarding business class routes,
corporate customer.” with Dubai being most likely to benefit. Lufthansa L50776
ttgbusiness.com a79 november 2008
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