Loading

Airline capacity discipline: a new global religion delivers better margins – but for how long?

Analysis

The world is entering its fifth year since the global financial crisis and world GDP growth remains below historic trend rates. In addition, fuel prices look set to remain in a historically high range. In spite of these headwinds, IATA is forecasting global airline operating margins of 2.1% and 2.9% in 2012 and 2013 respectively. While these margins are very slight compared with other sectors of the aviation supply chain, they represent a creditable mid-cycle level for the airline industry.

Capacity discipline appears to be helping mitigate the impact of a sluggish global economy and high fuel prices. In this analysis, we examine the relationship between capacity utilisation and airline sector profitability and derive our Capacity Index to assess the stage reached in the cycle. We also look at how it came to pass that the industry decided to embark upon the righteous path as disciples of capacity discipline.

Read More

This CAPA Analysis Report is 2,317 words.

You must log in to read the rest of this article.

Got an account? Log In

Create a CAPA Account

Get a taste of our expert analysis and research publications by signing up to CAPA Content Lite for free, or unlock full access with CAPA Membership.

InclusionsContent Lite UserCAPA Member
News
Non-Premium Analysis
Premium Analysis
Data Centre
Selected Research Publications

Want More Analysis Like This?

CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More