The current state of the market in aviation is unprecedented, said a leading aviation analyst.
Aviation Industry Research and Advisory managing director Chris Tarry said in 25 years in the industry he has never “seen anything like it.”
Speaking during a session on the future of the aviation he said the industry is facing huge pressure from high fuel prices, accelerating economic stress and pressures on discretionary income. For example, an increase in the price of oil will add 1.6bn dollars cost base onto the industry.
He said: “The industry in my view has become a lot more volatile and sensitive to change.
“It is unprecendented time for the industry.”
He predicted the failure of more low-cost airlines. “The low cost model is not in a sufficient condition to survive. A number of these low-cost airlines are distressed and set to fail,” he said.
He predicted a tough 2009 for the sector and said: “Whilst 2008 has been a difficult year – all the indications are that 2009 will be worse as economic factors kick in against what is expected still to be a high fuel price environment.”