A Commercial Aviation Consultancy


With the US airline industry consolidated, we would expect at least a short term discipline as the oligopoly finds its “natural” equilibrium.  As we have said before over the long term, there is always going to be a breakdown because of cheating.  Look at any oligopoly (i.e. OPEC) and we see that sooner or later the natural equilibrium isn’t enough.  Greed sets in and once one player cheats – and cheating is defined not by that player, but by the others – the system breaks down. Continue reading

Skymark is bankrupt and is a case study for an airline’s eyes being too big for its stomach. We were not alone in finding this airline’s order of A380s – especially six of them – to be over the top. Airbus, of course, grabbed the order because they need every one. Plus, breaking into Japan was irresistible to Airbus before it won the JAL campaign.

But here we are, Skymark is in deep trouble. In Toulouse last week we noticed a new Skymark A330 on the stand, seemingly ready for delivery. That’s clearly not going to happen. Intrepid Aviation leased a number of A330s to the airline. Apparently Intrepid Aviation is owed ¥100bn by Skymark which is about one third of its total debt of ¥320bn. But being on the hook for an A330 is a “relative breeze” – as these aircraft sell easily as the market loves them –… Continue reading

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