The aviation sector rode high on the wave of Australia's strong commodity-driven economy in 2007, an eventful year in which an $11.1billion bid for Qantas failed to lift off, but some analysts are tipping conditions to soften in the coming year.
Increased disposable incomes stimulated demand for travel domestically, while the strong Australian dollar encouraged locals to take trips overseas.
But will the aviation sector continue to cruise in the updraft in 2008?
Centre for Asia Pacific Aviation executive chairman Peter Harbison said, "All good things tend to come to an end.
"Is 2008 going to be the year that it's going to happen? My feeling is yes, we'll see a fairly significant downturn in the next six months," he said.
"The Australian economy is very strong apparently. But my personal feeling is that it's a bit more fragile than it appears.
"At the bottom line, things could change fairly quickly and the aviation industry is the first indicator, usually, of things changing."
Several analysts agree that conditions will soften for the industry in 2008, but most are divided as to when the turbulence will hit.
JP Morgan said the industry had already hit its peak.
"We have downgraded Virgin Blue from neutral to underweight," JP Morgan analysts Matthew Crowe and Russell Crichton-Browne said in a note. "Bureau of Transport and Regional Economics monthly yield data indicates that the domestic market cycle has most likely peaked. Yield data for Qantas domestic, which includes Jetstar domestic, also supports this view and shows signs of a decline."
Merrill Lynch analyst Kevin O'Connor said the aviation sector was in robust shape and didn't expect the industry to hit its peak until March or April next year, with conditions softening in late 2008 due to the addition of new seats to the domestic and international markets.
"From the aviation industry's perspective, we're going into the year in pretty good shape.
"Airplanes are very full, forward bookings are pretty strong and ticket prices are still going up," Mr O'Connor said.
"But by the second half of 2008 it could be getting a bit softer. You can expect in 2009, we'll be entering the year saying things have started to soften already."
Mr O'Connor said aviation capacity serving the domestic market was set to expand by about 10per cent in 2008.
"In the second half of the year Qantas, Virgin Blue and Tiger Airways are adding capacity domestically.
"Internationally, Virgin Blue plans to be flying to the US west coast by the end of next year and you've got Emirates who will be increasing their number of flights to Australia and Etihad."
He said the delivery of the Airbus A380 superjumbos would also increase capacity.
This year was a stupendous one in terms of profits for Qantas, with Australia's national carrier posting an annual net profit of $720million for 2006-07. In December, the airline upgraded its guidance once again, saying it now expects to achieve a 40per cent boost in pre-tax profit this financial year, eclipsing an already bullish prediction that pre-tax profit for the current year would be about 30per cent higher than last year's result of $1.03billion.
Profits aside, it was a turbulent year for the Flying Kangaroo, with the national carrier admitting to fixing prices on international air cargo shipments and agreeing to pay a $70million fine.
But the story of the year for Qantas was the controversial $11.1billion private equity bid for the company, which had the full backing of the board but which failed to get the required shareholder approval.
Soon after the bid's demise, Qantas chairwoman Margaret Jackson announced her retirement and non-executive director James Packer resigned from the board.
Small players like country airline Regional Express Holdings, or Rex, flourished against all odds in 2007.
Rex posted an annual net profit of $23.6million in 2006-07 and is predicting net profit growth of 10per cent in fiscal 2008.
Regional carrier O'Connor Airlines was not so fortunate in 2007. Debts grounded the airline in November after 34 years of flying.