IATA 2009 STATS TELL A SORRY TALE

Demand is falling faster than the airlines park up planes to reduce capacity and the consensus is the bottom has not been reached. It is projected collectively that the 226 member airlines will lose $9 billion this year on $448 billion. The IATA conference now taking place in Kuala Lumpur apparently has more journalists attending than airline executives! The world appears more interested in the fate of the industry than does the industry itself. Since last year’s conference twenty IATA carriers have vanished up to that hanger in the sky and many others before the year is out may join them too.

We can thank China for so much of what we have moved to over the past twenty years and one of the best examples is the airline industry. I call it the lowest common denominator syndrome. The deal is to just keep pricing everything cheaper, then cheaper and then cheaper still, and Elton John’s hit record, “I’m still standing” then takes a special and whole new meaning. This is China’s sinister hope that the west will ultimately capitulate and they will end up owning and controlling everything. So far they haven’t done too badly. Apart from the European Union never allowing British Airways to expand, Europe and America hope the consolidation that has taken place inside their territories will lead to a more viable and stronger industry. Well, you dumb fools who have been behind these changes take a look at where the industry is today. It is totally bankrupt!

Yes, the idiots who have formulated policy over the past twenty five years advocating and creating open skies and total global deregulation are to blame for the almost terminal illness of today’s airline industry, not the present recession. If there is one business that needs government and social oversight (and intervention if needed) it is aviation. Why is there so much safety attached to planes taking off and landing? Because throughout the world air traffic controllers are government employees trained by the government. Who do American carriers fear the most? No, in our litigious society and unlike the health care industry it isn’t the passenger and his ability to sue, it is the FAA. Whenever shortcuts in aircraft maintenance or service standards are discovered, the guilty airline pays a huge price. Remember Value-Jet and the oxygen bottles causing a mid-air explosion of one of their aircraft? Within months the carrier was out of business.

It wasn’t many years ago that a carrier was judged not only by the average age of their fleet, but probably more importantly by the cabin service standards in first class. Those sexily dressed, thirteen year old looking “Singapore Girls” (that’s how Singapore Airlines promoted them as) was the decision-maker for most executives to fly that airline. Most passengers would rather be served by a hot looking Asian girl straight out of high school as opposed to some forty year America Airlines’ and sixty plus year old veteran spilling coffee over you and telling you it was your fault. When the price of a ticket was such that even the back of the bus class would look forward to beautifully presented, appetizing and tasty meals, flying was an awesome experience. Today flying Singapore Airlines is not much different than flying dowdy old Malaysian, a very mediocre experience!

Before China Eastern and Air China take over the world, western governments, just as they have done with the banking industry, have re-regulate the airline industry. Until that takes place, the industry will continue on a downward spiral and eventually will be swallowed up by Beijing, China. Perish the thought!

Tags: Air China, American Airlines, British Airways, China, China Eastern, FAA, IATA, Kuala Lumpur, Singapore Airlines, Value-Jet