Who is next?

Hey there, time traveller!
This article was published 29/08/2008 (6500 days ago), so information in it may no longer be current.

Despite soothing words from the federal government about the implausibility of another airline dying in the short term, I would tend to fret.Simply put, there are too many seats in the sky serving too few passengers, all lof whom believe that they deserve a very low rate. The airlines’ pricing practices have been so peculiar over the past few years that nobody believes any number at all; travellers know the price of everything and the cost of virtually nothing.Even today, Air Canada are publishing fares from Chicago to London (via Toronto) for $276 return! Fees are extra, of course, but only in very small print. How is any traveller expected to have sympathy for an industry that perpetually cries foul yet persists on marketing its product at the same price point as a cheap table?Air Canada are not alone; China Easter will fly you from Shanghai to Johannesburg (and back) for $650, British Airways publish a one-way fare from London to Madrid for $6 (just shy of the Air Europa $10 offering), and even the rather upmarket Swiss will carry you back and forth between London and Santiago (Chile) for under $1000.So they go bankrupt; is it surprising?The really surprising thing is that so many airlines who preach the mantra of free enterprise have been propped up by adoring governments for so long that nobody believes in failure and acts surprised when it happens. Why are we surprised that Zoom failed when we have been witnesses to a parade of considerably more robust carriers through the bankruptcy courts?And why do we not listen to warning signs?The mathematics are simple; if a product costs you more to deliver that you can generate in sales, you will fail. The only variable is timing, and that is up to your backers. One may have deep enough pockets to survive the lean times until  the demise of several competitors allows one to breathe more easily. Or one may not.There will be more failures as the economy slows, travel is cut back and airlines need deep pockets, strong alliances or powerful niche markets to rationalise their services. Without at least one of these assets, I would not relish the role of and airline comptroller this winter.