Airlines set to experience turbulence ahead

Although the air travel market is currently still experiencing the post 9/11 boom that started four years following the original slump, caused by the terrorist attacks of 2001, major carriers should expect this period of success to come to a close in the near future. Commercial aviation analyst, Ben Cherniavsky, observed that the high cost of fuel, as well as a potential downturn in the

US economy will have a negative effect on the airline industry, and this will be felt around the world. Cherniavsky noted that overcapacity on some routes—where the number of airplane seats and flights are far higher than the actual consumer demand—would also pull down the industry’s fortunes. In a presentation to industry leaders and investors, Cherniavsky noted that he would remain “generally guarded” when it came to making predictions about the airline market’s future. At the same time, the analyst noted that carriers that are able to innovate, by modernizing their fleet of planes, decreasing expenditures and are able to take command of a given niche market stand a relatively good chance of growing in the near future.

Cherniavsky paid especially close to the North American market and observed that both Air Canada and WestJet have so far benefited from a lower US dollar. More Canadians are now traveling to the

US to do their shopping there and many are taking these two airlines. Nevertheless, the analyst noted that the fortunes of both Air Canada and WestJet may very well take a downward turn, as both of them are just as effected by soaring fuel costs as other all other airlines. Most experts predict that the value of Air

Canada’s shares will begin to fall in the near future, as their current rate is inflated and unsustainable.

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