AVIATION


WORDS GARY NOAKES


Faced with rising oil prices, Brexit and air traffic control strikes, the good times may soon be over for airlines


T


HE WORLD’S MAJOR AIRLINES have enjoyed robust profits in the past five years or so. Low fuel prices and soaring demand for air travel have kept their bottom lines very healthy. There are fewer carriers than a decade ago – particularly in the US – which has prompted higher fares on some routes and helped boost profitability in the industry. That, in


turn, has led to more investment; something now being enjoyed by passengers in the shape of new aircraft and more luxurious cabins and lounges. Throw in advances in technology, both in the air and on the ground, and travelling has become much easier and more pleasant. So far, so good, but as usual in the airline industry, there


is no room for complacency. The expansion and investment came on the back of low oil prices, but the price of the black stuff seems to be creeping up. On a more local level, the industry in the UK is also having to deal with Brexit. What that will mean, nobody seems to know, but airlines have had a taste of what it’s like to be unable to overfly countries – a potential post-Brexit situation – with recent strikes by air traffic controllers in France and other European countries. Willie Walsh, chief executive of the International Airlines Group (IAG), has called these strikes “the biggest challenge this year and next” to the industry.


OIL ON THE UP The future price of oil is a perpetual unknown, but a look back over the past 12 months does not provide comforting reading. In August 2017, oil was around US$45 a barrel, while a year later it had reached US$75. Based on renewed sanctions on Iran introduced by Donald Trump, which will see contracts with


of days of strikes in the first half of 2018 carried out by air traffic controllers in Europe


buyingbusinesstravel.com The number 29


strikes carried out in France, leading to 5,000 cancellations


2018 SEPTEMBER/OCTOBER 77


The number of days of


22


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