Airlines’ Loss Not Necessarily Bizav’s Gain

AINalerts » July 25, 2006
November 14, 2006, 10:07 AM

Into an increasingly acrimonious atmosphere in which the airlines perceive business aviation as competition for high-end travelers comes a study suggesting that airline losses do not necessarily benefit business aviation. The study is from Washington, D.C.-based aviation consulting firm The Velocity Group. According to the analysis, by fare category and estimates of business aircraft ridership, both the airlines and business aviation have shown similar growth between 2000 and 2005. Where the airlines have been hurt has been in the so-called “high yield” area of full-fare coach, business class and first class seats. In those seats, airline losses have been dramatic, from 79 million passengers in 2000 to 41 million last year. “The airlines aren’t losing passengers,” said Velocity Group’s Gerald Bernstein, “but they are losing revenue.” Bernstein explained that those high-yield passengers are moving to discount carriers and looking for better fares. “It’s not a wholesale migration to business aviation.”

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