By Mary F. Schiavo
When I was a Professor of Aviation at
the Ohio State University, the Chairman of our department was an
Aviation Economist, probably the best. He even understood the airline
seat pricing buckets and marginal pricing of airline add-ons. I was
skeptical about only one thing he predicted, and that prediction has
come true—aviation is now a mature industry, and the number of airlines
with excess capacity (empty seats) in the industry has diminished. We
have fewer airlines, fewer flights, fewer empty seats and fuller planes.
We also have far more fare categories as airlines learn to capture
every additional marginal dollar we are willing to spend.
Today, the Federal Aviation Administration (FAA) released its 30-year forecast
for the industry and confirmed everything my former Department Chairman
predicted. We have just nine major carriers, down from hundreds of
carriers in bygone eras.
What the FAA forecast reveals is
instructive. While all of Washington, D.C., fights over sequestration,
this document reveals that some belt tightening is in order because
demand for governmental services, at least those of the FAA, has dropped
as much as 30 percent in some categories.
Read more here: http://blog.motleyrice.com
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment