Great presentation from Mike Linenberg at the ALTA conference. I asked one question which was - are we going to see capacity cuts in Q1 and Q2 next year.
His answer was very deep. It was also interesting to note what he pointed out as a issues and reasons.
I am going to just pick out one aspect of his answer which was that there will be additional capacity cuts. Previously I have pointed out that I think its going to take another 5% cut. He actually predicts in 2009 that there will be 3% system cut and 5% of that is domestic. Where will that come from? Again interesting undertone as to why.
Older Aircraft and Older workers will take the voluntary buy outs and get parked. However there is a silver lining here in my opinion. Those bloated order books might actually work out with a trading of delivery slots amongst airlines to support the US airlines. However none of these actually will work directly within alliances as the big carriers wont likely trade. But the orders for say narrow bodies to India and China might get traded to the USA. Indeed the big capital players like DAE might now be looking at funding the US airline market via a back door. Since they are not allowed to directly invest (beyond 24.9%) and also it is politically unattractive for them so to do, leasing is OK.
And what do you think?
Cheers
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