Too much growth in airline industry

The global airline industry is experiencing “too much growth” and this would lead to difficult times ahead, a top official of Cebu Pacific warned.

In an interview on Centre for Aviation TV, Cebu Pacific Chief Executive Adviser Michael Szucs said “the industry’s over-ordered, and we think there’s too much capacity.”

He also said Cebu Pacific maintains a very conservative outlook over the next five years, compared to other carriers forecasting double-digit growth, which he questioned.

“I am not sure if the infrastructure can deliver it. I’m not sure if the financial performance can deliver it,” Szucs said.

“They’re not [going to get a profit] overnight. People will end up with portfolios of routes. They are [going to] end up with a high proportion of poor performing routes. It’s not financially sensible,” he added.

According to CAPA, over 2,900 orders of Airbus A320neo and 1400 orders of Boeing 737 MAX have been placed globally. Of these, over 350 are scheduled for delivery by year-end.

“There’s a capacity correction or a realization coming in. I think there’s too much growth coming in… I think it’s a difficult year ahead,” Szucs said.