Transcript Uncertain Times for an Uneasy Industry

Uncertain Times for an
Uneasy Industry
“It is the best of times,
…the worst of times…”
ABA Forum on Air & Space Law
January 28, 2009
Uncertain Times
Demand Destruction
– GDP slide, “opt-out” and modal shift to Business/GA
Energy Sensitivity
– Price volatility, availability, policy, need for allocations
Environmental Issues
– Proactive leader, yet a lightning rod for criticism
Productivity/Social Issues
– All time high, not high enough; lack of trust
Pricing Power
– Traction, dependent on industry capacity constraint
Uneasy Industry
Volatility – to manage, or not?
Customer targeting – populist, or niche?
Suppliers – “Keep your friends close…”
Product Attributes – full or self-service?
Regulatory – multilateralism, consolidation
Alliances – ATI/JVs all around! then what?
Business Processes – core, slim or ASP?
“Virtual Airline” – Holy Grail .. or too frail?
Darkest Before the Dawn
1990s/2000s business cycle hangovers
Creeping global recession
Credit market seizure and toxic remainder
Obsolescent fleets, slow liquidation
New technology disappointments
Glimmer on the Horizon
Expanding, insatiable demand for air travel
– Emerging economies, logistics, aspirational
Policy introspection and intertwinement
– Energy, environmental, transportation, economic
Technology/efficiency investment
– Energy supply, aircraft/propulsion efficiency
Rationalized national and global networks
But…new costs/taxes too: ATM, ETS, etc.
Uncertainty Rules
So, what else is new?
Durable trust between the parties would go a
long way to resolve internal issues
How to break through? What stimulus?
EU-US interest talks may be a blueprint
– Or recent actions drive the wedge in deeper