Musings of an
Aviation Investor — June 2023

Growth momentum has continued since the start of the year with airline equity prices tracking strong traffic demand ahead of what is predicted to be a boom summer in Europe and the US. So-called “Revenge” travel remains unsated even as consumer pockets come under increasing pressure from high energy costs, rising food price inflation and increasing interest rates.

As mentioned in my last piece (see Aviation Strategy, December 2022), leisure travel in the West is relatively price inelastic with flights to the sun an inviolable item in the annual family shopping list. Various commentary from airline management teams have recently stated that the consumer will give up Netflix and eating out before sacrificing the yearly beach holiday. Along with such sentiment in Europe, most carriers are predicting continuing double-digit percentage growth in fares after the already impressive rises seen last year assisted by moderating capacity growth.