Airlines in Transition part 3: How full service airlines are reshaping models to be more competitive
Over the past three decades, airline industry profits followed a fairly consistent cyclical pattern until the turn of the twenty-first century, which has so far seen seven loss-making years. If 2013 reports a profit, as forecast by IATA, the industry will have had four years of positive results (2010 to 2013). Nevertheless, profits are insufficient to cover the cost of capital and full service carriers still face critical challenges.
The global economy is still weak, fuel prices remain high, LCCs are undermining the legacy carriers' short-haul markets and the rapid expansion of Gulf carriers is having an impact on their long-haul markets. In our third report on CAPA's Airlines in Transition conference, we look at how FSCs are responding to these challenges.
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