From the Editor’s chair: 2008 and all that

Looking back over 2008 I can honestly say it has been a topsy-turvy year quite unlike any other I have reported on in my 20 years of following aviation.

Never before have I seen airline bosses so flummoxed as they tried to navigate through volatile fuel prices, falling demand and then plummeting demand.

Our editorial comments over the past year have been designed to capture and reflect the mood of the airline boardroom, and the stresses and strains placed upon airline leaders.

Back in December 2007 the Gulf carriers came out with an order blitz at the Dubai Air Show.

Our comment, echoed by others, was that the world should be putting on its seat belt as “the world of booming aircraft orders finally collides with the world of economic reality.”


This is not to say we are reading the tea leaves better than anyone else, it’s just that we believe in economic cycles and the simple fact that the downside was a coming.

In January 2008, we commented that there still seems to be no shortage of investors eager to take part in this dynamic industry, while in February we examined the first signs of China’s slowdown in the China applies the brake leader.

In March we indulged ourselves in the marketing debate – web vs GDS - but returned to a hang dog viewpoint in April.

In View from the Top, we said;

“The industry has clearly passed its peak. Now the question is how precipitous will the decline be and will the downturn finally spur consolidation in North America? And who will swoop in and buy into carriers as their stock prices continue to fall?”

In April, reflected in the May comment, bads thing really began to happen.

In that “Cruel Month”, we waved goodbye to Aloha Airlines, ATA Airlines, Skybus and Oasis Hong Kong.

The comment concluded with these words;

“It was American poet TS Eliot in his 1922 poem The Waste Land who wrote that “April is the cruelest month…” As far as the airline industry is concerned it is a month when the cruelty may only have just begun.

After considering whether the definition of a low-cost carrier was really redundant in today’s world in June, we returned to the gloom in July.

That comment was written following the IATA agm in June. It was entitled “For whom the bell tolls” and for me one of the most poginant quotes came from Virgin Atlantic boss Steve Ridgway.

“We all arrived here knowing that suddenly the reality of what has happened drew home to everybody: $135 fuel, economic slowdown, it’s pretty scary. And there are a lot of airlines that are really going to struggle.”


It was at this point that the reality of where the industry was headed came home to many.

Hard on the heels of IATA was the Farnborough Air Show, where once again it was the Gulf carriers, led this time by Etihad Airways, that piled in with the orders.

In September the consolidation story was unfolding fast. BA was angling for a wide-ranging alliance with America – surely the new world order was forming.

By the time we were writing the October issue comment oil prices had receded from the $140 a barrel high to under $100 and would fall further.

In Digging up weeds, we said this:

While no one wants a return to $150-a-barrel oil, the strong are relishing what a combination of high fuel prices and falling demand will do to market competition, the ability for further labour restructuring and the chance to pick up a bargain along the way.

The uncertainty many felt, and continue to feel, was why we called our November comment “Fortune teller needed”. Quite simply it was virtually impossible to see what 2009 had in store.

It’s no different today really is it?

By December the awlful truth of the credit crash was unfolding. Put simply, the supply of money has dried up, and what little there is, is expensive.

In “Mind the gap”, we said:

For the mischievous among us, it could be a good time to suggest beginning any meeting in this business where the discussion turns to money matters with a “mind the gap” announcement. The gap in question is that between the money needed to finance the 1,000 or so aircraft planned for delivery in 2009 and the money that will be available.


As we tidying our desks for the festive break, our minds were full of mating possibilities: airline ones you understand.

Big deals are going down and some big deals are being raised and then dismissed.

So what’s the big deal in 2009?

I honestly don’t know. All I know is that we will be talking to as many airline CEOs as we can in the next 12 months to try and make sure we know what they are thinking about, what they are concerned about and where they think the business is headed.

Then we’ll write about it.

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