Rising Airfares And Mergers Forecasted

By Author: Steve Robinson
Total Articles: 467
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Finding cheap airplane tickets and cheap vacation packages is expected to become more challenging in the face of soaring fuel expense, slack passenger demand, and the ongoing economic slowdown.

Reduced demand for airline tickets has resulted in excess capacity. Airline analysts expect more airline consolidation to come in order to remove excess capacity from the industry.

There has been a lot of talk recently about US Airways possibly merging with American Airlines. Three American Airlines unions agreed in April to support a potential merger with U.S. Airways Group.

Airfares have increased about 20 percent since their 2009 recession lows. Prices are expected to increase at least another five percent this year as airlines respond to rising fuel costs.

Further airline consolidation around the world is likely as the industry comes to the end of a time when air travel is dominated by national airlines subsidized by governments. Currently a number of airlines are unsustainable without major continuing government investments which are becoming increasingly unlikely.

Today the airline industry ...
... is forced to operate inefficiently because of the difficulties of operating in a global market. Many airlines today are only able to operate because they are substantially owned and effectively controlled by their countries they operate out of. In response, the industry has had to develope a series of global alliances that enable airlines to offer seamless travel to any part of the world through partner airlines.
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