Air Transport World

Winning airlines, winning strategies.(Air Transport World conference)(Conference news)

ATW'S WINNING AIRLINE STRATEGIES conference held in Washington in late February brought together senior executives from some of the world's leading airlines, technology suppliers, academia and consultancies to talk about developments in reservations, distribution and marketing and customer service as well as aeropolitical issues.


As has become a tradition, the conference opened with a keynote address by Avitas Senior VP Adam Pilarski, who rejected two staples of current industry thinking: That consolidation is necessary and that the industry suffers from chronic overcapacity.

Drawing on nearly 25 years of quarterly traffic and financial data from the US Dept. of Transportation, Pilarski argued that there is no correlation between industry profitability and capacity movements. Profits have occurred during times of both rising and falling capacity, he noted. Specifically, 81 quarters experienced year-over-year capacity increases and 22 had declines. Profits rose in 58 quarters and fell in 45.

Likewise, he rejected the notion that airlines need to consolidate. "Did United go into Chapter 11 because it was too small?" he asked. "What we really need is restructuring instead of consolidation ... I don't see the benefits of a [merger] among equals at all."

Pilarski dismissed the idea, put forward most recently by US Airways in its failed takeover attempt of Delta Air Lines, that joining two large carriers produces synergies leading to cost savings. …

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