Never in the history of aviation between the two countries have fares been so low and still flights are departing half full. Showman, Richard Branson, may have bitten off more than he can chew here. First of all, he is a bit of a Donald Trump. He doesn’t exactly use his own money and that being the case, his backers may have a different view from him into how much of a loss the airline can sustain before they will want to pull the pin. With Delta, they are so used to bankruptcy, so it is a slightly different case. Once upon a time Continental and Pan Am (United bought the Pacific routes in the eighties) ruled the skies to the South Pacific and Delta, now the world’s largest carrier, feels it can pick up that mantle once again. American carriers have an advantage that reorganizing in bankruptcy is a “piece of cake” so the decision for Delta to fly where they have never done so before was done on the basis that commercial considerations obviously took second place. If it fails, bankruptcy is an easy option out!

My belief is Virgin will not last very long and Delta, just like Continental, Northwest and America, will pump a fortune into promoting the route only to fail like their three predecessors. Qantas will prevail, because it possesses the image of the most successful international regional carrier in the world, something that Dickson a couple of years ago set out to destroy.

Now international travel is on a huge decline, the future looks bleak for over half the world’s carriers. Instead of mergers like KLM and Air France, Lufthansa and British Midland most of the terminally ill carriers will simply shut shop. Mojave Desert, already overflowing with unwanted planes will within a couple of years be overflowing with repossessed aircraft from the Asian and African continents. There will be more airline people joining the dole queue than from the auto industry! My thoughts are before this recession is over the number of carriers still operating will be at least halved from the boom times of post 9/11.

Surviving airlines hoping that with less competition they will able to hike the prices will be in for a rude awakening. The western world, especially America will only contemplate travel if the price is right. No more banging a $12,000 family vacation onto the plastic card anymore and spending two years paying it off at 15.99% compounded interest. We will follow the Chinese and all our spending decisions will be based upon three basic considerations; price, price and price.

As for cargo, there may some markets not well serviced by freighters or competing airlines, where the demand will dictate pricing levels, but overall, most passenger carriers will continue to “drop their pants” because they absolutely need the incremental revenue that cargo brings. Some forwarder mentioned to us the other day he received a minus rate into Asia! Believe that! I do because Asian carriers are truly hurting and will for a long time. They can maintain the fuel surcharge at inflated levels but are will to discount that in order to move freight at a zero rate! Talk about how the world has been moving to the lowest common denominator. Who knows, the barter system of the Stone Age may return as the bargaining tool to do business.

The CII team continues to leave no stone unturned and like the good family we are, we continue to look at each day as a new beginning. Tony Feist, who heads our special projects operations has just returned from tropical Apia and Pago Pago with new business literally coming out of his ears! Most forwarders wouldn’t risk (and rightly so) jumping head first into these third world type banana republics. I was also a skeptic that is until Tony chose to work with us. He came to us after fifteen years of building up relationships in the Samoa’s. The truth is during this time it has become a second home for him. Yes, we are primarily there to support the tuna fishing industry, but in order to survive, we must also look at opportunities we would not have considered in better days. The Samoa’s require all sorts of urgent goods: from pharmaceuticals to telephone equipment, to airplane parts and Tony is there to move the goods in a timely fashion.

Australia is picking up and our wholesale customer list is actually growing, but volumes unfortunately aren’t. However, we are dealing and we will not lose one kilo of freight on price. In these tough times we must keep the wheels turning and more than ever before every customer and every shipment, no matter how small, truly counts!