Airline Weekly - December 17, 2007
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Airline Weekly - December 17, 2007

Looking Back, Looking Ahead: A review of the ten top developments in 2007— and what to look for in ’08

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Looking Back, Looking Ahead: A review of the ten top developments in 2007— and what to look for in ’08

’Tis the season for year-end wrap-ups. Fortunately for us, the airline industry always produces plenty of excitement, and 2007 has been no exception. Here, in no particular order, are Airline Weekly’s top ten noteworthy developments for the year, as well as a quick glance at what to watch in the year ahead:

Airlines voraciously buy new planes for a third straight year: The industry has ordered more planes so far in 2007 than it did during each of the previous two years, spurred by growth opportunities linked to deregulation, expanding economies, falling non-fuel costs and new aircraft technology, along with the need to replace older planes and burn less fuel. The B787, though delayed, continued to fly off the shelf, even though America’s three largest airlines haven’t bitten yet. The A350 sold well, too, while the larger A380 attracted more attention for its debut to revenue service than its ability to attract new customers (though it did win some important buyers like British Airways). Will the order boom last for another year? No, say both Airbus and Boeing.

Airlines come under fire for their contribution to climate change: Global warming is now a huge political issue throughout the world, and airlines increasingly find themselves on the defensive for producing emissions that some say disproportionately contribute to the problem. During 2007, airlines attempted to diffuse the threat by committing to lower emissions and advertising their green credentials. But it wasn’t enough to stop new taxes and plans for emissions trading in Europe. Whatever their true contribution to the problem, airlines may see environmental pressure get a lot more intense in the years to come, a threatening prospect.

The weak U.S. dollar alters global traffic flows and offers cost relief for many non-U.S. airlines: Carriers that earn their revenues in euros, British pounds, Canadian dollars, Brazilian reals, Chinese yuan and many other currencies got a break in 2007 thanks to the weak dollar, which made jet fuel and dollar-denominated debt less expensive. Like jet fuel and many loans, aircraft are also priced in dollars, which helped... (367 of 1470 words)

Also Inside this Issue:

With just a few weeks left until the end of the year, Lufthansa made headlines by buying a significant though non-controlling stake in New York’s jetBlue. For now it’s just an investment and nothing more, but the relationship will likely become more strategic over time.

Airlines announced some exciting new routes last week, including one that Singapore Airlines plans to start between its home base and Houston via Moscow. That’s a route that nicely symbolizes two major trends in network expansion during 2007: the addition of international longhaul markets and the attraction to cities which sell much of the high-priced energy that airlines are compelled to buy.

There were other interesting route developments last week: Lufthansa adding two new cities in China, Northwest adding three new cities to London Heathrow, Jet Airways adding two new cities to the Arabian Gulf and Emirates adding more Africa service. If there was any doubt that the world is becoming more globalized than ever, look no further than airline industry route maps for proof.

Our own proof here at Airline Weekly is the geographic diversity of our readers, whom we’d like to wish a happy holiday season wherever you are. We look forward to more exciting airline news in 2008.

About Airline Weekly

Airline Weekly is a subscriber-supported publication, paid for by readers who want a more interesting, more valuable read about the airline business. Each Monday, Airline Weekly reports who's flying where, new marketing approaches, fleet, finance and key airline and airport data. And, most importantly, Airline Weekly readers enjoy a critical context, insightful analysis and new ideas found nowhere else.

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