The crisis in the airline industry could run beyond the generally predicted 2003/04 timeframe and could last until 2005/06, according to a leading consultancy firm.
"The necessary conditions are fundamentally stability," says Duncan Craig, vice president of defence and aerospace consultants AT Kearney. "After 11 September, people predicted we would come out of it in 2003/2004. Since then we have had the war in Iraq. Had it been confined to these two things then we would not have been in such a bad position. Now, because of things like SARS, people are beginning to wonder if it might extend to 2005/06."
The industry needs stability while continued threats of terrorist attacks, or the possibility of another conflict in the so-called "war on terrorism", could hinder recovery in the industry, Craig believes.
"These threats will continue to cause a degree of uncertainty in the minds of the travelling public," he said. Despite the uncertainty, the long-term future for air travel remains highly positive, said Craig. "That will not go away. This is no industry in decline. Everyone recognises the growth in the future while having to deal with the issues of the present."
Several issues have arisen from the post-11 September world, including a failure for a business aviation boom to materialise and the potential for airports with inappropriate security to lose business.
Craig said that many people expected rapid growth in business aviation as executives shunned airlines and major airports. "The market is pretty bad at the moment and it is causing problems to the players in it," he said. "There was a lot of talk of a boom in business jets but it has not materialised."
Passenger confidence at airports is another issue, as airports tighten up security. "Passenger confidence could be affected by security that is overdone or underdone. There is already a hassle factor in getting to airports, going through check-in and now getting through the security."
His colleague manager Matt Abraham said that in the manufacturing side of the industry, the recession offered both challenges and opportunities. Consolidation had happened at the higher levels of the industry but less markedly in the tier two and tier three levels.
Source: Flight Daily News