ABSTRACT
While the above graphs and table undeniably provide an overview of the most significant developments in the air transport business, they do also ‘mask’ a number of evolutions. First and foremost, there are the short-term effects and potential regional differences. The air transport sector faces potential great risks on the demand side, including volatile oil prices, the impact of Influenza A (H1N1) and terrorist threats. Cash flow is affected by weak demand, leading to capacity adjustments, and worsened by fare discounting upon several years of continued cost reduction, making it difficult to cut costs any further. Table 2.2 shows evidence of how the economic context is affecting the sector in the different geographical markets. The developments described above have altered the air transport landscape profoundly. Particularly in respect of the actual carriers, the industry has evolved towards a typology consisting of at least four categories: network airlines, regional and smaller network airlines, charter companies, and low-cost airlines. Starting from this typology, one can discern quite divergent evolutions:
• The picture in Europe is mixed. The three largest carriers (British Airways, Lufthansa and Air France) have performed well. However, there have also been a number of bankruptcies (e.g. Sabena and Swissair), while other companies have had to contend or continue to contend with looming crisis (e.g. Alitalia). In the charter market, there were some successful start-ups (e.g. TCAB), followed by a concentration movement resulting in a limited
number of large groups (e.g. Thomas Cook and TUI). Another notable trend has been the rise and growth of some important low-cost airlines (Ryanair, easyJet, Air Berlin, . . .).
