Plenty to talk about...

Even the psychically gifted would be nervous about making predictions for five years out in the aviation industry, but here’s a crack at the local market in that sort of timeframe:

Three airlines flying domestic routes, but with two of them in the same group, effectively marking a return to the two-airline status that defined the 1990s.

Qantas persisting with the two-brand strategy, but with the bulk of its domestic traffic carried by Jetstar; and overall a reduced market share, somewhere closer to 55 per cent.

Virgin Blue (or whatever its called by then) effectively delivering the old two-class product that used to be Qantas; and enjoying an enhanced and broader-based market position that has brought it closer to parity. The Blue is enjoying a significant slice of the business market, having refined its product and service delivery to successfully attract the corporate traveller.

Internationally, Qantas is structured pretty much the same way, with the majority of its hospitality being delivered by Jetstar, even on long-haul routes; but with premium product still carrying the flying kangaroo livery.

The New Blue has re-entered the international market after pretty much withdrawing from it for a period to focus on re-inventing its domestic positioning.

Only one of the three European mega-carriers is flying into Australia and it’s the smallest one. The Middle East hubs have grown their share of Australasian-origin traffic, but just two Mid-East based carriers are still operating routes Downunder. Asia-Europe and Asia-North America are challenging the trans-Atlantic for traffic density bragging rights.

In aircraft terms, the A380 has just achieved break even, with deliveries into its two markets reaching the right number. While orders from established customers continued to creep up, the breakthrough came from the airliner finding its other niche in thick domestic routes, particularly in North Asia.

The B787 has been an unqualified success, despite its difficult birth; and the A350 has become an attractive option.

Both major manufacturers have started work on their narrow-body replacements, with customers desperate to put newer and more economical technology to work in this category. The CSeries interloper has garnered some interest, but largely through bargain pricing driven down by pressure from the majors.

The three regional aircraft manufacturers are entrenched at the upper end of their market, but are under their own pressure to develop new and innovative products. ATR in particular is enticed towards developing a replacement for the Saab 340-size market where a void is emerging.

On the MRO scene some global trends are established. The A380 support is centralized in Frankfurt and Singapore, but there might be a need for a northern Asia facility.

The airport scene within Australia has sprung no surprises at the Tier One level, with Brisbane and Melbourne clawing back the Sydney advantage. But the dramatic change has been the emergence of rural hubs to provide a much overdue rationalization of route structure. The new Federal government is talking of a revision to the original White Paper to reflect significant changes in the industry. Widespread consultation is promised before any process is begun.

We have posted this editorial from the current issue of Aviation Business magazine on the website so you can respond with your perspectives.