Ian Douglas, Senior Lecturer of UNSW Aviation, has written an article about the recent grounding of Tiger Airways in Australia. It underlines the difficulties of the airline business.
The global airline industry has consistently failed to generate an adequate return on capital, even in the best years of the past decade.
Rising fuel prices now often account for half of the operating costs of an airline, and a greater proportion for a low cost carrier like Tiger. The fuel price increase has choked off last year's recovery in operating margins worldwide.
Australia is a tough place to run a low cost carrier operation.
The full article can be viewed at The Conversation website.
Ian was also interviewed by ABC News discussing the future of the airline. Click video to view the interview.