2008 was an exciting year for aviation. If we look at the airlines we see many airlines on the brink of bankruptcy and several different strategies to deal with this problem. Some seek to increase fares airlines and add additional costs for almost every extra possible, they may think, and this is having a negative effect on customer loyalty and satisfaction. Other airlines looking to consolidate and merge with competitors, some are adding costs and seek to merge. It is afree for all.
Then in the industry of aircraft manufacturing, we have Boeing against Airbus. Boeing has bet on new aircraft carbon composites which makes them lighter and therefore much more efficient, while their arch enemy and rival Airbus's market happens to the biggest airplane in the world so they can carry more passenger of a single flight and reduce the cost per passenger. Both strategies appear to work as orders for the Airbus A380 and 787 are strong.
Airlines discount areokay, but no airline today can claim to be breaking the sound barrier. The fuel cost is prohibitive, and even if all airlines increase fares, there is a fare that much of the public flying will just stop flying. And this can be considered as many airlines withdrew their aircraft less efficient and therefore, taking capacity out of the market. The offer and the number of airliners is cut away from prudent business decisions to cut unprofitable routes.
RichardBranson of Virgin Airways recently said it would be ugly one years for airlines and we could see a major carrier's bankruptcy file, perhaps several. The line of thought agrees with that and think that some carriers take until May 2009 or 2010, but the upheaval in the industry will continue bankruptcy and important announcements are indeed coming.