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A (not very funny) circular joke

Tags: Cargo industry

Oliver Evans on Thursday, November 29, 2012 4:00 PM

Honestly, our industry could be a very happy place, alive with giggles and laughter – if we only recognized the spectacular joke we play on ourselves year after year.

Here it is:
Every now and then there is an economic upswing (no, that is not the joke, hold on).
Demand surges, the yields follow suit, and suddenly there is not enough capacity. Every manager worth his salt spends his nights crying over passengers and cargo he had to leave behind, and spends his days shuttling between Toulouse and Seattle, on a serious shopping spree. The trouble is, unlike his spouse he cannot take his purchase home in a nice paper bag. In fact, it will take years before his beautiful new planes with that fabulous extra capacity hit the tarmac. It is not that he is unaware of this, mind you, but hey, what can he do?

Anyway, when the time comes, the demand for which he purchased his planes in the first place has mysteriously vanished and all he can do is to utter that universal comment we all use when things happen just the way we could and should have known right from the start:
“Oops.” (And there are many “Oops” in the industry right now).Then, in a rush, he cancels or postpones as many orders as possible – unwittingly prolonging the joke ad infinitum: a couple of years from now, there will inevitably be capacity shortages which will lead to another frantic shopping spree which in turn will lead to…

Yet, nobody is laughing. I hear you: “Of course not! It is not funny, it is a disaster!”
And you are right. Is there any hope? Well, it helps to remember that today we are in one of those cyclical downturns, which should put everything a bit into perspective. Secondly, the good part of the cycle is somewhere out there, waiting for us. How close we cannot tell, but rest assured: there will be another upswing.
Third, there is one non-cyclical factor which should make us rather optimistic in the long term: globalization, the emergence of new middle classes, accelerating technological innovation, etc, are continuing their steady path. And air trade will continue to be the engine of globalization, with strong and sustained growth.

The trouble is, alongside all these other developments, an entirely new phenomenon is arising: the public-private collaboration by a few enlightened countries who have not only understood, but embraced airlines and air trade as engines of growth. So that what is happening today may not be a cycle or circle after all, but a spiral. And whether it will be an upward or a downward spiral depends very much upon who you are, and what you do. 

So, if you don’t mind, I have work to do, and no time for any jokes.

Thank you for tuning in!


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Published by Edw Korleski on Friday, November 30, 2012 8:42 PM
Hi- I guess I do not really understand your point. The last time I responded back to you was that your blog placed Kenya in West Africa... Thsnks anyway!
Published by Gao Xiaolong on Friday, November 30, 2012 12:44 AM
Hi Oliver, What do you think is likely to be the drive for the next upswing for cargo? Rgds/Rick

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