Discipline Necessary for Aviation Market Success

DUBAI — Discipline and a reduction in capacity must occur for the global aviation market to succeed despite a downturn in demand, according to a United Airlines manager.

By Zoe Sinclair

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Published: Thu 23 Oct 2008, 11:53 PM

Last updated: Sun 5 Apr 2015, 2:24 PM

United Airlines Worldwide Sales Senior Vice-President Jeffrey Foland made the comment while speaking to Khaleej Times at the Business Travel Show ahead of the airline’s inaugural Dubai to Washington flight on October 27. The flight will be a daily service.

“This is a region of interest for all of the obvious reasons – its growing very significantly from a commercial business stand point, leisure traffic is continuing to grow here as well,” according to Foland.

“It’s not been motivated just by the downturn in the US market – our customers tell us where they want to fly.”

However Foland did say the aviation industry, especially in the US, had had to adapt to the prevailing aviation downturn and the most recent market turmoil.

“We’re going into this with our eyes wide open. The good news is, a dynamic environment is not new to this industry. If you rewind the clock 18 months, fuel has obviously escalated quite dramatically in that time. If you rewind the clock a bit further we had 9/11 which had quite a profound impact. We’re very well aware of this particular economic situation and it reinforces the need to be very prudent and rigorous with where we allocate our assets.”

Foland said the airline still saw a global demand for air travel but said the US aviation downturn had seen companies take retire older, larger aircraft, reduce frequencies on weak routes, and increase on others.

“In the United States we’re eliminating the Boeing 737 fleet. The overall capacity within the US is substantially lower than it was a year ago.”

“When you look at international destinations, there’s been some shifting of assets to those destinations.

“That’s what we’re looking at – somewhere that still has robust demand – in this case (Dubai) is still growing.”

Jeff said the effects were not restricted to the US, with business travel already seeing reduced demand.

“There’s been a lot of discipline and capacity taken out of US market which allows an economic viable market.

“Discipline will have to happen on a worldwide basis because that’s the only way airlines can have the funds to succeed.

“Internationally our capacity is relatively flat in recent times. It’s (Middle East) growing in importance to us.”

Marcel Fuchs, United’s managing director Europe, Africa and the Middle East, said the Dubai service came after serious consideration and following the success of the airline’s Kuwait service.

“We’re seeing more US businesses moving to the region with their regional headquarters. We’re quite pleased with the forward sales.

“We’re seeing good connectivity of traffic specifically from contract business, military, government into Dubai. There’s no question we’ll benefit from that as well.”


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