More international carriers will go belly up, CEO warns
Friday, 13 June 2008：In the last six months 24 carriers around the world have collapsed due to increase financial burdens, but Virgin Atlantic CEO, Steve Ridgway warns that there’s more to come.
Commenting on how carriers can survive, Mr Ridgway said that he felt the industry, as a whole, needed to lift prices in a “fundamental repricing” strategy.
“Ultimately the industry is going to have to re-price,” said Mr Ridgway in an interview with Reuters. “That will have an effect on demand and that will ultimately have an effect on capacity balance.”
Especially in relation to the US market, where overcapacity has already seen nine small carriers being squeezed out of the market.
“Carriers are going to go out of business and need to go out of business,” said Mr Ridgway, in one of the strongest statements regarding the state of the aviation industry.
He also commented on the need for more fuel efficient planes, and the frustrations on waiting for late deliveries, as most carriers are looking at 12-18 month delays on their A380 and B787 craft.
“In this world you want to be flying the most modern, the most efficient fleet you can,” said Mr Ridgway.
“We’re in a relatively strong position, certainly compared to many of our competitors.”