Aircraft availability has now reached unprecedentedly low levels, mirroring the situation of 1999, a year which was followed by one of the industry's worst downturns. The rapid growth of airlines in India, China, Asia and Eastern Europe is consuming aircraft immediately as they become available. This squeeze is now affecting airline's ability to grow, making market access difficult and expensive.

With new single-aisle production now sold out until 2011, airlines wishing to add capacity in the next 4 years have no choice but to lease or buy used aircraft. Control of the aircraft supply chain has, for now, passed squarely to the leasing companies.

So should airlines acquire capacity now or wait? Well, every market is different, and some markets have opportunities which must be grabbed now if first mover advantage is to be gained. In other cases, maybe it is possible to wait. For how long no one can say for sure. There is a downtown coming in the airline industry, but will it be in 2008, 2009, 2010?

Airlines that implemented their plans for new capacity a few years ago and are now receiving aircraft are clearly at a competitive advantage over those getting around to it today. Firstly, because they are getting aircraft for lower rates and secondly, because their supply is assured - allowing predictable company growth. Competitors cannot respond because they have so few aircraft.

What is sure is that there are few great aircraft deals out there to be had. At tasc, we are seeing that 16-year old A320s are now leasing for $220,000 per month and similar age 737-300s for $190,000 per month. If you prefer to buy, 6-year old A319s are on offer for over $35m, probably not great change out of their original purchase price.

If you do need capacity in the short term, there are still a few opportunities. 16-year MD83s are available for below $80,000 per month, allowing quick market access before a switch to more modern equipment like the A320 in a few years. If you prefer to have that modern A320 equipment today and the lower fuelburn and maintenance cost that it implies, as well as a better cabin, then the market premium will have to be paid.

The airline industry continues to deregulate, which is resulting in the traditional vertically integrated airline model being dissected piece by piece from all sides. It is a similar phenomenon to the venerable high-street department store which also tried to cater to every need - and now finds itself struggling in the 21st century against specialist high class fashion and food stores at the upper end and discount super stores at the lower. Many flag carriers like department stores risk getting caught in the middle.

First, from below, the Low Cost Carriers decided they would bite off the economy class market and have set out to build efficient cost driven solutions to provide simple A to B travel through high productivity and low fares. The worldwide success of this model has been the story of the last decade of the airline industry.

In the middle, the network carriers have also been busy - cutting costs and re-making their business models with tailored solutions for each market segment. Airlines like British Airways and All Nippon now offer four classes on all inter-continental flights - with all the necessary investments on product design, seating, revenue management that this implies. It is difficult to be all things to all people - so we see KLM, Lufthansa and Swiss employing the services of Privatair to fly all Business Class A319LRs and BBJs on premium traffic routes.

Now from above, there is a new breed of all-premium class airlines which are targeting the other end of the market, the cream. These airlines are focusing on the routes with the most premium traffic and want to carry just the high-yield front end traffic, leaving the economy class passengers to others.

There are now four all business class airlines flying across the Atlantic, three on the very busy London to New York corridor, with L'Avion serving Paris to New York. It is interesting to see that even within this niche, all these airlines are offering quite different solutions to the market. However, it is still too early to tell how well or not they might be doing in terms of profitability.

Aircraft Interiors Expo 2007 took place recently in Hamburg and the tasc cabin consultancy team was in town. It was a good opportunity to meet our clients and to see, touch and smell the latest products and trends in seats, IFE and cabin monuments. As promised by organisers, the show was bigger and better than ever, with a new exhibition centre, more exhibitors and more visitors. There was definitely plenty to see … the problem was where to start! 

A common theme between Economy Class seat suppliers this year was the concept of controlling your own personal space, basically ensuring that when the passengers around you recline, they do not encroach on your space. Sicma’s Airgonomic FX seat, not only enables you to manage your own living space, but it also has its own IFE system built in.

Another seat along these lines was The Freedom Concept from Contour – economy class seats where half of seats are aft facing. Looking surprisingly like Etihad’s Pearl Zone, the advantage is additional space for the passenger at shoulder and knee level. This additional space can be used to increase the pitch (which all passengers appreciate) or it can be used to add additional rows to expand revenue at today’s comfort level.

The new Virgin Atlantic Premium Economy seat was on show - not anything new in terms of innovation – but the deliberately square design in a sea of round seats, the thick cushions when other manufacturers are slimming down, along with the trade mark Virgin red made the retro seat stand out from the crowd.

Sticking to the bigger & better theme, Singapore Airlines’ new First & Business Class seats are the widest seats in their class by some margin! The seats are reflective of the perrenial need for more comfort, which in the airline business often means more space; the new concept is innovative and creative! Passengers in Business will need to get used to sitting facing forward but sleeping diagonally.

The seats for SQ’s A380, due to be delivered in October this year, are meant to be even bigger & better! The cabin of the first A380 has now been fitted in Toulouse but we’ll have to wait another few months to see what this service pioneer has in store!

The last, and probably most impressive seat in which we had the pleasure to recline was again from those smart people at Contour – the Venus, a fully-flat mini suite, stylishly elegant and simple. If only all we could all travel in First Class!

Sweet dreams wherever you are flying! 

tasc celebrates its fifth birthday in 2007 and like any youngster, it has evolved considerably in its formative years. In that time, the services offered by tasc have both broadened and deepened. This was the thinking behind our recent decision to update the tasc appearance – to re-fresh our look and reflect our current service offering.

Total Airline Services Company was founded in Dubai in 2002 with the mission to bridge the gap between aircraft products and airlines by offering expert service solutions. Initially, our focus was the aircraft spares business, but over the years the company has also become a key player in the airline strategy and cabin management fields. During that time, we found customers liked to refer to us simply as tasc, rather than the words the acronym stood for … a bit like one does for BP or UPS.

So, coinciding with the launch of our new website tasc.aero, we took the opportunity to revise our branding. We wanted to update, simplify and invite, yet assure a certain continuity. Our selected design team retained the idea of services revolving around an aircraft motif, yet simplified the logo with warm shades of green combined with lower case lettering in a modern grey font. We think they did a great job – creating something contemporary, logical and convivial … we are all quickly getting used to our new clothes.

Every corner of the world now seems to have its own low cost carrier and it is interesting to see how the recipes differ in each country. In the Middle East, we see wide variations in approach between Air Arabia in Sharjah, Jazeera in Kuwait and the latest Saudi start-ups, nas air and sama. We recently had the pleasure to go and visit jazeera in Kuwait to hear about their impressive success after just over a year of operation. With the recent announcement of a Dubai base, Jazeera becomes the first Middle East carrier ever to open a foreign base (excluding multi-national Gulf Air). Another unique element to Jazeera’s model is its two-class approach; it obviously believes there is sufficient front-of-the-bus traffic to bear the increased operational and commercial complexity – things most LCCs prefer to avoid. The premium product is called Jazeera Plus and with its flexible format, it is a smart take on business class appropriate for an LCC. When business class demand is low, a Jazeera A320 offers 165 all economy class seats. For routes or times of the day/week when business demand is high, up to 36 Jazeera Plus seats can be quickly created in 2x2 comfort with the deployment of a table from under the centre seat of the triple. This idea is not new – it has been in use with Air France for years – but it is new for an LCC and this seat is far more comfortable and classy (Jazeera’s leather seats are made by Brice). A smart solution to ensure load factors remains high no matter the market. Different horses are suited for different courses.