Will the legacy carriers be the next designer brands?

Air traffic has doubled every 15 years and it is expected to continue at the same exponential rate of growth over the next decade. However in economy class over the last 10 years, the legacy carriers have inexorably lost market share in the short-haul market to the LCC (Low Cost Carriers) who are now taking on the legacy carriers on the long-haul market as well. On the other hand, upper classes have largely remained the realm of the legacy carriers with most of them earning over half their revenue from upper class customers while the economy class with 75% to 80% of the seats and about half the space capacity generates less than half, in some cases as little as a third of the revenue. It is also reasonable to assume that, given the market conditions and the marginal profitability of legacy carriers, the economy class is sustained by the more profitable upper class.

The metamorphosis of travel and tourism

How much mass tourism can squeeze on an island?

In the short span of a generation, travel and tourism has gone through a sweeping evolution with everything becoming easier, faster with fewer intermediaries. Wheels on our baggage, paperless travel, booking a room on your smartphone while walking in the lobby of that hotel, bringing your own lunch aboard, etc. a multitude of seemingly small changes that together have created a new dynamic causing a metamorphosis in the industry.

The flow of tourism no longer originates exclusively from developed countries as emerging countries, historically only exotic destinations, became significant generating markets in the last decade. The emergence of low cost carriers and online travel services have sent traditional travel agents the way of video stores. Tourism is now a two-way street anyone can use, mostly, without the middleman. There is still good business to be had for the middleman with groups, MICE and highly specialized experiences, but in a different role of coordination rather than information and booking. Destinations and operators, once dependent upon travel agents in generating markets to bring them customers, are now reaching customers directly and taking bookings without intermediaries.