DOES personal experience help in picking investments? If so, summer flights create a research opportunity.

Holiday travel brings us up close to airlines’ idea of customer service. Usually, this means a mixture of full capacity, delays and other travel frustrations, but it might be wrong for investors to let feelings carry over into investment judgement.

There is a lot that is starting to go right for the sector.

The first sign of change is higher ticket prices. This is mainly driven by a higher oil price, which has risen by 50 per cent over the last 12 months.

Production quotas and supply disruptions are also combining with global economic growth to squeeze capacity. It looks like a major headwind for the airline industry, which often suffers a lag in passing these costs on to passengers.

In the past, airline shares have usually been out of favour when oil prices are high.

But something different is happening this time: the sector is actually gaining positive comment from City analysts.

The disappearance of Monarch and Air Berlin, combined with the bankruptcy of Alitalia, have brought consolidation and pricing discipline into the industry and surviving airlines have been able to acquire the airport slots of their collapsed competitors.

This consolidation reinforces the prospects for efficient survivors - some of the operators that we love to hate. The departing airlines might be missed by consumers, but they had been doing a lot of damage to the economics of the industry.

Not all airlines are equally impacted by higher oil prices; cost pressures create winners and losers. The older flag-carrying national airlines find it much harder to pass on costs as they typically run less efficient operations.

Legacy systems and culture are an ongoing drag on the flag carriers and higher oil prices seem likely to accelerate the shift away from the older airlines towards newer low-cost operators.

Indeed, every challenge the sector faces is an opportunity for the younger airlines to show how nimble they can be and investors should see challenges for the sector as something that drives structural change.

Observant travellers will already see new charges for seat selection and luggage. For the airlines, raising prices becomes easier as planes approach full capacity.

Surviving airlines are also proving more adept at using customer data to sell hotels, car hire and other travel services. Passengers will see bigger operators starting to behave more like broad-based travel platforms, leveraging their brands to compete.

At the same time, airports are competing to attract the passenger volumes the new carriers can deliver, allowing new routes to mainstream hubs.

Flights that arrive at little airports miles from the city are almost a thing of the past while the traditional favour shown by major airports towards the flag carriers is rapidly fading.

Retailing is now central to airport strategy; while passengers may resent the time spent waiting at airports, we shop, eat and drink nevertheless.

Fares are rising and the sector appears to have increasing potential to pass on oil prices. The larger low-cost airlines should have a good summer, even if that is not what passengers want to hear. Possibly investors focus too much on the short-term outlook – long-term forecasts are for passenger numbers in Europe to grow at 2.5 per cent annually.

Industry consolidation is forcing a shift to low-cost carriers and the most efficient operators. It means a constant focus on cost control, but even the airlines that historically placed little value on customer experience will work to improve their brands.

Full airports and planes might be uncomfortable, but investors should try to switch their perspective from the consumer experience to the economics of it all. The sector is evolving into one with price discipline and more stable earnings.

Colin McLean is managing director of SVM Asset Management.