Pessimistic optimism

Lauren Eldershaw
By Lauren Eldershaw January 29, 2019 16:12

Pessimistic optimism

The oxymoron is a perfect way to describe the mood on stage at the seventh Airline Economics Growth Frontiers Dublin conference. Before the event opened, industry stalwarts expressed their hope that the speakers this year wouldn’t be too pessimistic about the industry. Their hopes were realised for the most part. The most optimistic presentations from day one of the conference came from Gerry Laderman, CFO of United, and Steven Udvar-Hazy, executive chairman of Air Lease Corporation.

Laderman’s traced the evolution of the US airline industry from 1970s through deregulation, many airline restructurings, post 9/11 crisis period to revitalisation over the past decade. The figures show a startling improvement in the fortunes of US carriers, even over the past five years. Over 35 years, between 1978 and 2012, the US airline industry made an aggregate loss of $37bn. Between 2013-2017, the industry made an aggregate profit of $80bn. US carriers are now generating consistent profits and the general consensus is that this will continue despite the concern over geopolitical and economic headwinds that are building.

These headwinds are the foremost concern for aviation leaders in the 2019 Aviation Industry Leaders Report, Tackling Headwinds, published by Airline Economics and KPMG, which are also closely tracking developments with the escalating trade wars and the departure of the UK from the EU. Like the global economy, which is generally accepted to have peaked – the latest International Monetary Fund (IMF) forecasts point to a gradual slowdown over the next few years – the aviation industry cycle is also generally accepted to be on a slow downturn. The 2019 Aviation Industry Leaders Report summarises the expectations, challenges and opportunities for the next 24 months for the strongest companies.

Lauren Eldershaw
By Lauren Eldershaw January 29, 2019 16:12