state of survival - survival of the fittest guide

If weaker, smaller airlines were able to survive 2017, oil decided their fate in 2018. It's wiped off profits for some airlines, while completely killing off others.

Over the past 12 months, the global state of aviation - not just in Europe - has been widely determined by the oil price. If overcapacity heats competition in Europe up to unsustainable levels, an airline's exposure to the oil price can often be enough to send it over the edge. The airline faced fierce competition from both sides and collapsed amid its flawed strategy. Monarch was present in both the low-cost airline market and the leisure airline market, while failing to be a market leader in either. Airline executives for more fragile carriers determine the amount of cash needed to carry the airline through the quieter winter period where demand lowers and they can struggle to break even.įor operators such as Monarch Airlines, overcapacity was a mere contributor in a flawed business model for a viciously competitive 2019.

But come late-September, the cracks start to show in weaker players that may not have secured enough bookings for the upcoming winter period. In summer, airlines tend to be cash-rich given the sudden increase in travel demand. Will we see a European airline collapse over the next few months? It's unlikely. In essence, there are simply too many airlines flying too many seats to the same destinations - without enough passengers. Ryanair CEO Michael O'Leary warned that the European airline industry faced more consolidation and bankruptcies while recognizing his own airline recorded its first quarterly loss in five years earlier this year, following 'unsustainable low-fares'. Overcapacity has driven out the weaker players, while at the same time, the failures have triggered a new wave of consolidation.

State of survival - survival of the fittest guide