Jetrader - Spring 2016 - 16
State of the Regions:
United States
THREE
Trends to
WATCH
in
T
By Jeff Fogel
2016
The wheel of fortune ratcheted to a stop in
2015 with U.S. airlines perched at its top.
The bad times were behind them, including the ugly bankruptcies and negotiations
for survival. In 2015, airlines no longer
saw one-third of their operating cost going
to pouring $3.25 per gallon kerosene into
their planes. Oil prices were on a nearly
steady downward pace towards $30 a barrel.
Airlines in the U.S. consumed 8,923 million
gallons of Jet A in 2015, nearly a 4 percent
increase over 2014, but paid 36 percent less
for that fuel.
With lower fuel costs overwhelming
weaker unit revenues, better profits defined
the year. In the first nine months of 2015,
U.S. airlines cumulatively posted nearly
$17.9 billion in profit after taxes, a leap
from $241 million in the last quarter of
2014. And ancillary revenues (you mean I
have to pay for checked bags and snacks)
helped ticket prices remain attractive
enough to boost 2015 load factors to
85 percent.
So, what will the upcoming year portend?
There are three trends to watch.
Mergers: The Dust Settles
With the last round of mergers complete,
the "Big Four" no longer exclusively refers
to accounting firms. How will this play out
in the near future?
The trend is viewed with curiosity by
Adam Pilarski, Ph.D., senior vice president,
AVITAS, Inc. "In Europe, it's much smaller
operations that are on the rise," he said.
"Here, it's consolidation. And in Asia, there
are more new carriers. There's proliferation
of carriers everywhere but in the U.S."
Pilarski expressed surprise that the mergers were approved. "We're the country of
competition," he said. "Less competition
means lower prices, right? Prices haven't
gone up because fuel went down. So,
16 The official publication of the International Society of Transport Aircraft Trading
they're making good money. Eventually,
though, you'll need competition to keep
prices down. The Big Four are all similar.
If anyone good came along, they'd have to
make changes."
What about new competition? Pilarski
doesn't see it happening immediately.
"It's very hard for new start-ups," Pilarski
said. "It takes a long time and a lot of
money. Our regulatory environment is not
conducive to any new competition."
But the reshuffling of airline ownership
has produced another wild card: the unions.
How will they react to the newfound profitability? Will they want to return for more
negotiations? "That's the question of the
year," said Robert Agnew, president and
chief executive officer, mba. "They've been
a part of the bankruptcies. So will they come
back with re-negotiated contracts?" Some
contracts become amendable in 2016, and
labor is likely to want its share of the profits.
Jetrader - Spring 2016
Table of Contents for the Digital Edition of Jetrader - Spring 2016
A Message from the President
Calendar/News
Q&A: John Leahy, Chief Operating Officer – Customers, Airbus
State of the Regions: United States
Flying High
ISTAT Events Stretch Around the Globe
The Youngest Veteran
A Labor of Love
Don’t Waive Goodbye
Changes Ahead for the IAP
Aviation History
Aircraft Appraisals
ISTAT Foundation
Advertiser.com
Advertiser Index
Jetrader - Spring 2016 - cover1
Jetrader - Spring 2016 - cover2
Jetrader - Spring 2016 - 3
Jetrader - Spring 2016 - 4
Jetrader - Spring 2016 - 5
Jetrader - Spring 2016 - 6
Jetrader - Spring 2016 - A Message from the President
Jetrader - Spring 2016 - 8
Jetrader - Spring 2016 - 9
Jetrader - Spring 2016 - Calendar/News
Jetrader - Spring 2016 - 11
Jetrader - Spring 2016 - Q&A: John Leahy, Chief Operating Officer – Customers, Airbus
Jetrader - Spring 2016 - 13
Jetrader - Spring 2016 - 14
Jetrader - Spring 2016 - 15
Jetrader - Spring 2016 - State of the Regions: United States
Jetrader - Spring 2016 - 17
Jetrader - Spring 2016 - 18
Jetrader - Spring 2016 - 19
Jetrader - Spring 2016 - Flying High
Jetrader - Spring 2016 - 21
Jetrader - Spring 2016 - 22
Jetrader - Spring 2016 - 23
Jetrader - Spring 2016 - ISTAT Events Stretch Around the Globe
Jetrader - Spring 2016 - 25
Jetrader - Spring 2016 - 26
Jetrader - Spring 2016 - 27
Jetrader - Spring 2016 - 28
Jetrader - Spring 2016 - 29
Jetrader - Spring 2016 - 30
Jetrader - Spring 2016 - 31
Jetrader - Spring 2016 - 32
Jetrader - Spring 2016 - 33
Jetrader - Spring 2016 - 34
Jetrader - Spring 2016 - 35
Jetrader - Spring 2016 - 36
Jetrader - Spring 2016 - 37
Jetrader - Spring 2016 - The Youngest Veteran
Jetrader - Spring 2016 - 39
Jetrader - Spring 2016 - 40
Jetrader - Spring 2016 - A Labor of Love
Jetrader - Spring 2016 - Don’t Waive Goodbye
Jetrader - Spring 2016 - 43
Jetrader - Spring 2016 - 44
Jetrader - Spring 2016 - Changes Ahead for the IAP
Jetrader - Spring 2016 - Aviation History
Jetrader - Spring 2016 - 47
Jetrader - Spring 2016 - 48
Jetrader - Spring 2016 - 49
Jetrader - Spring 2016 - 50
Jetrader - Spring 2016 - 51
Jetrader - Spring 2016 - 52
Jetrader - Spring 2016 - Aircraft Appraisals
Jetrader - Spring 2016 - 54
Jetrader - Spring 2016 - 55
Jetrader - Spring 2016 - ISTAT Foundation
Jetrader - Spring 2016 - 57
Jetrader - Spring 2016 - 58
Jetrader - Spring 2016 - 59
Jetrader - Spring 2016 - 60
Jetrader - Spring 2016 - Advertiser Index
Jetrader - Spring 2016 - 62
Jetrader - Spring 2016 - cover3
Jetrader - Spring 2016 - cover4
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