Cheaper flights and bargain airport transfers sounds like a great thing for holiday makers. But what is actually going on in the airline industry at the moment, and how will it affect passengers in the long term?
Many airlines are currently revealing low profit figures for the past twelve months, with a number of the larger airlines, including Quantas Airways, reporting a loss.
At a national level, there are also signs of the current industry struggle. Low cost airlines such as Flybe are experiencing difficulties; the Exeter-based company have reported a 6.2 million pre-tax loss. Another low cost carrier, BMI Baby, will undergo closure this year.
In an overall view of the current European situation, the continent’s airlines have been predicted to deliver a record loss of over one billion dollars. For an industry that was flying high only a few years ago, many are asking how these dramatic changes have come about.
The causes for these losses are both obvious and discreet, with several factors contributing. Rises in oil prices last year hit the industry hard and, although prices have dropped by eight percent this year, the combination of oil prices and other strenuous influences have left many airlines struggling to recover.
The economic crisis has played a large part in the lead up to what has been described as an airline ‘storm’, and many fear that a global economic slump could be on the cards. Director General of the International Air Transport Association, Tony Tyler, stated that ‘If the world enters an economic slump, that will be even worse for the industry than the higher fuel price was on its own’.
As airlines struggle to accommodate the drop in passenger numbers caused by the economic crisis and rise in oil prices, downsizing and staff cuts are being considered and implemented. In fact, the rise in staff and airport costs have also contributed to the current ‘storm’ taking place in the airline industry.
The question many people are asking is, what does this mean for passengers? The good news is that the situation may in fact benefit many passengers flying in the coming year rather than have a negative effect. The drop in fuel prices has led to cheaper flights in the first half of this year.
Although passenger traffic is still comparatively low on some airlines, bargain prices are enticing more people to fly and ensuring that great deals are available.
Competition amongst companies supplying airport transfers is also ensuring that prices are kept low, and there are now a number of low cost alternatives offering great value transfers to all the major UK airports.
As Rob Gill, founder of Suntransfers.com says “Airport transfers have typically been the domain of the well healed business traveller. However through mirroring the “no frills” approach of the low cost airlines, services like ours are able to offer all the benefits of being picked up at the airport and reaching your destination in the fastest practical time. You’ll still get the air conditioning, the only difference is the lack of chauffeur’s hat and a much, much reduced fare”.
Although a large proportion of the general public may be struggling financially at the moment, in many ways, there has never been a better time to travel. As airline economy wavers, now is an opportune time to take advantage of lower flight prices and cheaper transfers.
Written by Sophie McGovern