As I gaze into what the future holds for air travel, I see that it is undergoing such a vast change that everything will be different in two years and everything will be unrecognizable in five years.
I predict that most network carriers will be charging for seat selection in the next 12 months. I predict that European carriers and U.S. carriers will merge, perhaps not officially, but unofficially in ways that will get around the U.S.’s concern about foreign ownership of air carriers. Even more cities will be abandoned by the network carriers. Other carriers will move into the vacuum where it make financial sense. The low-cost airline model will completely take over at all of the major carriers.
Some other factors that will shape the future of air travel:
— Open Skies negotiations between the U.S. and the EU
— Airline consolidation
— Merchandising to offer consumers greater choice and maximize revenue
— Fuel costs
— The FAA’s outmoded air traffic control system
— The introduction of the Boeing 787, and to a far lesser extent, the Airbus A380
The biggest overlooked factor in what’s hobbling U.S. airlines is their IT systems, which are so old and outdated that most of the big airlines do not have the data capacity to adapt to changing times. I predict that either they will adopt new IT systems soon, or they will fade away.Operating costs are still high, and capacity reductions are tied to high costs. Americans are traveling less, and we are starting to see that slowdown in international markets as well.
Suffice to say that 2009 will be a very difficult year for the airlines.