Given the problems at Wow Air, should we be worried about the future of the airline industry?
Yes – Anthony Hynes is chief executive of eNett international.
With Iceland’s Wow Air and other airlines going bust recently, it’s undeniable that the airline industry is going through some turbulent times.
In fact, our recent study shows that between 2003 and 2018, an average of 52 airlines insolvencies have occurred each year – almost one a week.
Many factors are influencing this – from increased capacity and competition to the rise of low-cost carriers. Upticks in fuel costs have also induced financial distress for airlines that weren’t able to raise fares or lower other costs, as we saw with Primera Air and Monarch.
Of course, there are also many factors that are unpredictable and completely out of airlines’ control, such as political uncertainty, the threat of war, and natural disasters. These factors can sap demand for tickets, and push an airline towards failure.
Other businesses, such as travel agents, could also be badly hit by an airline insolvency. As such, agents must safeguard themselves from the potential of future airline failures.
No – Tim Alderslade is chief executive at Airlines UK.
Recent political events have drawn attention to the airline industry, with a particular focus on Brexit and the continuation of travel between the UK and the EU.
Passengers should, however, continue to book their holidays as normal. Both the UK government and EU Commission have said categorically that travel will continue, whether we reach a deal or not.
The UK continues to be a world-class player in aviation, with the third largest network of routes in the world, an enviable choice of carriers, and customer satisfaction levels that compete favourably with other modes.
Recent events, including the sad demise of Wow, should not lead us to question the long-term stability of the industry. Instead, we should focus on wider competition issues, and whether carriers are being unfairly burdened with cost increases that continue to impact their bottom line.
If ministers can successfully deal with these issues, airlines will continue to connect people around the world.