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Old February 20th, 2009, 04:54 AM   #101
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Business-class air travel drops in December - IATA

GENEVA, Feb 18 (Reuters) - Airlines sold far fewer business and first class seats in December, though economy travel in the Christmas period was buoyed somewhat by tickets bought before economic gloom set in, a global industry body said on Wednesday.

The International Air Transport Association said "premium" traffic was 13.3 percent lower in December than the same month in 2007, following the 11.5 year-on-year drop seen in November.

"This precipitous fall has been driven by the abrupt decline in business activity and international trade around the world," IATA said in its latest Premium Traffic Monitor.

Asia had the largest drop, with Far East flights filling 25.1 percent fewer top-tier seats compared to the year before, said the Geneva-based IATA, which represents 230 airlines including British Airways, Cathay Pacific and United Airlines.

Singapore Airlines, the biggest airline by market value, said on Monday it was cutting capacity by 11 percent in the year from April due to waning travel and cargo demand.

Overall, December premium traffic fell 8.8 percent in the North Atlantic region, 16.3 percent in Europe and 4.2 percent in the Middle East, according to IATA's data that excludes domestic flights.

Africa was an exception with 11.8 percent year-on-year premium traffic growth in December.

In economy class, the picture was less bleak. Some 5.3 percent fewer people took cross-border flights in December compared to the year before.

"Leisure trips at this time of the year may well have been pre-booked before the full extent of the recession was apparent, so an accelerated fall in economy travel numbers should be expected in January," IATA said.

"With jobs being lost at an increasing rate during January and consumer confidence falling further it seems that the bottom has not been reached for air travel and even weaker numbers may become evidence in the first few months of this year."

For 2008 as a whole, IATA said premium travel fell 2.8 percent while economy travel rose 0.9 percent.

Because economy tickets represent more than 90 percent of all tickets sold, overall passenger numbers on international markets flown by IATA airlines grew 0.5 percent last year.

Although sliding oil and jet fuel prices have given airlines some respite, IATA said weakening passenger and cargo demand has created new problems, causing both fares and yields to drop.

Premium tickets normally make up about 8 percent of total passenger numbers but 15 to 20 percent of revenues. IATA said airlines saw a 20 percent drop in premium revenues in December, which if sustained could cut 3 percent or $15 billion from the airline industry's annual revenues.
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Old February 27th, 2009, 02:38 AM   #102
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Slump in air travel, cargo, accelerates: IATA
26 February 2009
Agence France Presse

International air travel traffic slumped even further in January plunging the airline industry deeper into crisis, the industry association IATA reported Thursday.

Passenger demand fell by 5.6 percent in January compared to the same month last year, a full percentage point worse than the decline recorded in December 2008, the International Air Transport Association (IATA) noted.

The steep fall in air cargo also accelerated, demand dropping by an unprecedented 23.2 percent year-on-year in January, compared to a drop of 22.6 percent a month earlier.

"Alarm bells are ringing everywhere," IATA chief executive Giovanni Bisignani said in a statement.

"The industry is in a crisis and we have not yet seen the bottom."

"Every region's carriers are reporting big drops in cargo. And, aside from the Middle Eastern carriers, passenger demand is falling in all regions," Bisignani added.

Some of the decline was offset by cuts in flights, but the 2.0 percent cut in global airline capacity failed to keep up with the decline in air travel.

The biggest regional fall in passenger travel and air cargo again occurred in Asia, previously the industry's biggest source of growth in recent years.

Passenger traffic dropped 8.4 percent in January despite the traditional boost for the Chinese New Year, while air cargo in the region, the biggest global air freight market, fell 28.1 percent.

IATA said the prospects for passenger traffic in Asia this year "remain dismal."

North American carriers suffered a decline of 6.2 percent in passenger travel, largely due to the fall in demand on trans-Pacific routes, while freight fell 19.3 percent.

In Europe passenger demand fell by 5.7 percent last month, more than double the decline seen a month earlier, and freight fell 23 percent.

The Middle East was the only region to experience growing air travel, of 3.1 percent, but it was far below the double digit growth recorded by airlines based in the region last year.

Bisignani repeated criticism of additional flight taxes in Europe, especially while tax breaks were being lined up in other sectors to stimulate economic growth.

"Don't tax us to death in order to pay for investments in the banking industry," said the IATA's chief.

"This includes the UK government's plans to increase multi billion pound Air Passenger Duty and the Dutch government's misguided departure tax," he added.

IATA maintained a forecast of a 2.5-billion-dollar (1.9-billion-euro) loss for the industry in 2009.

The crisis is set to wipe 35 billion dollars off revenues, leaving airlines with a total of 500 billion by the end of the year, according to the association.

IATA groups 230 carriers covering more than 90 percent of scheduled international air traffic, with the exception of exclusively low-cost airlines such as Ryanair and EasyJet.
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Old March 3rd, 2009, 04:24 AM   #103
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Asian air cargo slumps 23.6 pct in January
26 February 2009
Agence France Presse

Air cargo demand in Asia slumped 23.6 percent in January while passenger numbers dropped 7.8 percent, the Association of Asia Pacific Airlines said Friday.

"The collapse in world trade is having a severe impact on airfreight demand, forcing airlines to temporarily ground a number of dedicated freighter aircraft," association director general Andrew Herdman said in a statement.

"Passenger travel demand is also weak, with premium traffic particularly hard hit as businesses seek to cut costs in response to the global economic downturn."

The association said that the number of international passengers carried by its member airlines dropped 7.8 percent to 11.4 million in January 2009 compared to a year ago.

Average passenger load was down nearly five percentage points to 73.9 percent.

In the cargo sector, there was a 23.6 percent decline in international freight tonne kilometres in January compared to the same period a year ago, it said.
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Old March 19th, 2009, 04:54 PM   #104
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Airline '09 losses to pass previous estimates-IATA

KUALA LUMPUR, March 19 (Reuters) - The losses of world airlines in 2009 are likely to exceed the $2.5 billion forecast previously, as the global economic crisis eats up passenger and cargo traffic, an industry body said on Thursday.

"Our last industry forecast made in December was for a $2.5 billion loss in 2009 based on a 3 percent fall in passenger demand and a 5 percent demand in cargo," said Giovanni Bisignani, Director General and CEO of the International Air Transport Association (IATA).

"This is now looking very optimistic and next week we will issue a revised forecast," he told reporters.

IATA, which represents 230 airlines including British Airways, Cathay Pacific and United Airlines, said earlier this month world airlines lost up to $8 billion last year, far more than the $5 billion previously estimated.

In January, international passenger demand fell 5.6 percent year-on-year, following a 4.6 percent decline in December, according to IATA. February numbers are to be released next week.

Cargo volumes in January fell 23.2 percent year-on-year after December's 22.6 percent decline, the eighth consecutive month of contraction for freight traffic.

Bisignani said while economy travel demand has also slumped in response to the global financial crisis, a much faster decline in the premium segment, which airlines depend on for their bottom line, was hurting more.

"Business classes are empty. The airlines make money in the front and recover the cost on economy, and when the business class disappears, it's a big problem," he said.

Airlines around the world have been battered severely by the global financial crisis and have unveiled a slew of cost-cutting measures to stay afloat. Asian carriers have been worst hit.

Singapore Airlines, the world's biggest airline by market value, last week asked staff to take unpaid leave for up to two years in a bid to reduce costs.

The Singapore carrier, which last month announced plans to cut its capacity by 11 percent and has grounded 17 of its 100-plus aircraft, had already asked pilots at its cargo arm to volunteer for unpaid leave.

Cathay Pacific, the dominant airline of Hong Kong and Asia's fifth-largest carrier by market value, which reported a record $1 billion second-half loss recently, said last week it could sell some assets to raise cash.

Bisignani said he expected more capacity cuts by airlines across the world to adjust to slowing demand.

"You see further capacity cuts practically every week in different parts of the world. We have to try to adjust capacity to demand," he said.
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Old March 24th, 2009, 06:43 PM   #105
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Airlines face losses of 4.7 billion dollars in 2009: IATA
24 March 2009
Agence France Presse

Airline industry association IATA on Tuesday sharply increased its loss forecast for carriers to 4.7 billion dollars in 2009, which is set to be "one of the toughest years" that the sector has faced.

The new forecast, equivalent to 3.4 billion euros, by the International Air Transport Association marked a sharp rise from the 2.5 billion dollars in losses for 2009 that it predicted in December.

The industry group also raised its estimate of total airline losses for 2008 from 8.0 billion dollars to 8.5 billion dollars, blaming a "very sharp fall in premium travel and cargo travel."

"2009 is shaping up to be one of the toughest years that the airline industry has ever faced," said Giovanni Bisignani, IATA's director general, who also described the year as "grim."

While the forecast losses for 2009 were barely a fraction of the 13 billion dollars the industry lost in 2001 following the September 11 attacks in New York, Bisignani pointed to rapidly deteriorating revenues to stress the severity of the current crisis.

In December, the industry association forecast revenues would fall 35 billion dollars or 6.5 percent for 2009, but on Tuesday, it raised the loss to 62 billion dollars or 12 percent.

Bisignani called it a "shocking difference."

The industry is particularly hurt by the fall in premium traffic, or first class and business class seats, where airlines typically make their money.

Although the airline industry's prospects may improve towards the end of the year, "expecting a significant recovery in 2010 would require more optimism than realism," Bisignani insisted.

"Given the scale of this crisis and the impact on premium traffic and revenues, even with the best of optimism, I do not expect a significant recovery in 2010. This impact of this crisis will be with us for some time," he warned.

The only bright spot is falling fuel prices, noted Bisignani. Oil prices have plunged from a peak of over 140 dollars a barrel last July to around 50 dollars now.

However, some airlines anticipated that prices would continue soaring and therefore hedged or took out forward contracts based on the higher prices last year.

They are now paying elevated prices despite the fall, IATA explained.

Overall demand is projected to continue to slide this year, with passenger traffic shrinking by 5.7 percent over the year.

Asian-Pacific carriers are expected to be the worst hit, with the biggest losses to be posted by these airlines amounting to 1.7 billion dollars this year as demand tumbles 6.8 percent.

European carriers are forecast to post 1.0 billion dollars in losses while Middle East carriers are seen losing 900 million dollars.

Only North American carriers would post a profit of 100 million dollars, as they benefited from having trimmed capacity earlier and lower fuel prices, according to IATA.
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Old March 26th, 2009, 06:53 PM   #106
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Air travel slump accelerates in February: IATA
26 March 2009
Agence France Presse

The sharp decline in air travel accelerated in February as global passenger volumes nosedived 10.1 percent below levels recorded a year earlier, the airline industry association IATA said Thursday.

The double-digit fall in passenger demand was almost twice that of the 5.6 percent decline recorded for January, the latest data from the International Air Transport Association showed.

Airlines were unable to cut their capacity fast enough to keep up with the slump.

"The 5.9 percent reduction in capacity -- the most aggressive since the crisis began -- could not keep pace with the fall in demand," IATA said in a statement.

Freight traffic fell by 22.1 percent in February, in line with falls in December and January.

"Freight traffic, which began its decline in June 2008 before passenger markets were hit, has now had three consecutive months in the minus 22 to minus 23 percent range," IATA added.

Giovanni Bisignani, IATA's director general, said: "We may have found a bottom to the freight decline, but the magnitude of the drop means that it will take time to recover."

But even as freight traffic stabilises, airlines are now feeling the squeeze in passenger traffic.

Airlines in the Asia-Pacific region posted the sharpest fall in demand, 12.8 percent, as export-dependent economies cut back on business and leisure travel, particular those to long-haul destinations.

Capacity cuts of 7.8 percent were unable to make up for the drop in demand in the region, said IATA.

North American carriers posted a 12.0 percent drop, while European carriers saw traffic plunge 10.1 percent.

Latin American airlines lost 3.8 percent in passnger traffic, but that was closely compensated by cuts in capacity of 2.4 percent.

Only Middle Eastern carriers bucked the trend with a rise of 0.4 percent in international traffic.

IATA on Tuesday sharply increased its loss forecast for airlines to 4.7 billion dollars in 2009, saying it was set to be "one of the toughest years" that the sector has faced.
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Old April 9th, 2009, 08:14 AM   #107
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Europe's airports report big drop in traffic

GENEVA, April 8 (Reuters) - Europe's airport network rang alarm bells on Wednesday over the effect of the global recession on their business, reporting steep declines in passengers and cargo traffic since the start of the year.

The industry's regional body ACI-Europe said travellers passing through the continent's domestic and international terminals in January and February were down 12.2 per cent compared with the same period in 2008, and freight dropped by 23.7 per cent.

The figures were in line with similar falls in passengers and freight reported by international airlines and industry analysts said they showed how another, more community-based, branch of the global travel industry was suffering.

"The double whammy of falling aviation and commercial revenues is hitting Europe's airports more and more severely with each passing month," said ACI-Europe's Director General Olivier Jankovec.

"On top of that, the capital intensive nature of airports means that we are also being squeezed by the ongoing paralysis of capital markets," he declared in a statement issued from the body's Brussels headquarters.

ACI-Europe links 440 airports in 45 countries, from giants handling more than 50 million passengers a year to tiny businesses such as Mostar in Bosnia which processes only 9,000.

Among major ACI-Europe members are Britain's Heathrow, operated by BAA [FERBA.UL] a subsidiary of Grupo Ferrovial , Germany's Frankfurt, owned by Fraport , France's Charles de Gaulle, part of Aeroports de Paris and Russia's Moscow-Domodedovo, while its smallest members include Linz in Austria, Knock in Ireland, and Berne in Switzerland.

Airports around the world are closely tied to local economies, generating thousands of jobs and commercial activities in catchment areas, so a serious decline in their business can have a wide knock-on effect.

The growth in the past decade of smaller airports handling much of the booming budget airline and internal air travel sector in Europe and North America is credited with bringing prosperity to once less-favoured regions.

The Geneva-based Airports Council International (ACI) says that worldwide, domestic travellers passing through its members' facilities in February were down 10 per cent and international passengers down 11 per cent compared with the same month in 2008.

ACI, the industry's global body, says travellers taking international flights from airports throughout the world were down 11.3 per cent in February while domestic travellers declined by 9.4 per cent against February 2008.

International freight moved from world airports was down 23.5 per cent and domestic freight dropped by 12.4 per cent, according to ACI's latest figures. (Editing by Jonathan Lynn)
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Old April 10th, 2009, 09:33 AM   #108
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Air trade slump highlights task facing G20

PARIS, April 7 (Reuters) - Airlines are unveiling more evidence of the uphill task facing world leaders as they seek to kickstart moribund trade, with freight traffic plunging again in March and empty business seats adding to growing losses.

U.S. majors which have reported passenger traffic declines of up to 13 percent were joined on Tuesday by rivals including Air France-KLM. Europe's largest airline said it had carried 9.4 percent fewer passengers and 19.2 percent less cargo in March.

Annual comparisons are less dramatic when adjusted for the fact that the Easter holiday, traditionally a busy travel period in Christian countries, falls in April not March this year.

Yet airline traffic figures are in the spotlight because they provide crucial economic signals for March, for which official data is not yet available, just as the world's economic powers try to breathe some life into flatlining global trade.

G20 leaders agreed last week on a $1.1 trillion package to boost the economy including a $250 billion infusion of funds to unfreeze international trade, about half of which goes by air.

Shares in Air France-KLM on Tuesday fell up to 4 percent.

It was the fourth month in a row that the world's largest carrier of international freight, with operations balanced across the globe, has seen cargo bookings drop about 20 percent.

"It just goes to show foreign trade is going really poorly at the moment. We are expecting very weak (February) data for French exports and imports tomorrow," said Alexander Law, economist at French research consultancy Xerfi.

Air France-KLM also revealed a "significant deterioration" in passenger unit revenues in March, days after it abandoned hopes of making money in the just-ended fiscal year.

In Scandinavia, SAS said March passenger traffic fell 16.7 percent and Finnair said it was slashing ticket prices to try to fill its seats..

The Finnish carrier's March cargo traffic fell 17.5 percent.

Shares in SAS fell 7.3 percent and Finnair fell almost 6 percent. British Airways, which last week warned on profits as March traffic fell 7 percent, lost 2.7 percent.

GLOBAL SUPPLY CHAIN

Tuesday's stream of data arrived after U.S.-based Delta Air Lines, the world's largest carrier after taking over Northwest, said overnight its passenger traffic fell 13 percent and cargo activity dropped by a whopping 35.5 percent in March.

Delta and Northwest together make up the third biggest domestic airline freight network, according to latest IATA data for 2007.

Out of sight from ordinary passengers, the amount of cargo in the belly of a passenger jet or on special transporters provides precious clues to the flow of unfinished goods in the economic pipeline -- a possible indicator for future activity.

Supply chains in the globalised economy mean exporters increasingly rely on imports of components or semi-finished goods, often from dozens of other countries.

In Europe, factories have resorted to selling from stored inventory, rather than producing more goods from imported parts -- for which trade financing is in any case hard to find.

While cargo volumes have plummeted since December as a result, economists say supply chains are so tight that activity could leap upwards again as soon as the economy begins to stir.

Whether that will signal a true recovery is less certain.

"On inventories, you're probably going to have a technical recovery at one stage; you do hit rock bottom and you can't get any lower," economist Law said.

"But it doesn't mean there will be a pickup in demand. It just means you've emptied out your warehouses and you've got to have a vital minimum to sell."

Data also coincided with signs that tourism is suffering after holding up relatively well compared with business traffic.

France said tourism, which accounts for 6 percent of its economy, fell 3 percent last year and will fall again this year.

France kept its spot as the world's top tourist destination with 80 million visits last year but there were fewer from Britain, Germany, the United States and Japan.

Germany's Air Berlin, which provides both charter flights and city links for businesses, said on Tuesday its March traffic fell 5.6 percent, sending its shares 7 percent lower.
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Old April 28th, 2009, 05:02 PM   #109
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Mideast airlines March passenger demand rises - IATA

DUBAI, April 28 (Reuters) - The Middle East was the only region where airlines saw any growth in passenger demand in March, the International Air Transport Association (IATA) said on Tuesday.

The 4.7 percent rise in international passenger demand, up from a 0.4 percent rise the previous month, "represented an expansion of market share" of Middle East carriers, IATA said.

Airlines in the region also increased capacity by 13.1 percent, it said, creating an imbalance in the market.

Earlier this year, IATA said that after several years of rapid growth, Middle Eastern airlines were likely to double their losses to $200 million in 2009 as they felt the pinch of the global financial crisis.

But many of the region's carriers have been reporting steady growth. Last month, Abu Dhabi-based Etihad Airways said it expected revenue to grow 24 percent to $3.1 billion this year as it takes delivery of 11 aircraft and boosts passenger numbers by adding at least six new routes.

Carriers elsewhere around the world saw passenger demand fall sharply in March. North American carriers posted a 13.4 percent decline in passenger demand, while European airlines suffered a 11.6 percent drop, IATA said.

In Africa, passenger demand slipped 15.6 percent, and Latin American carriers saw a 5.9 percent fall.
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Old May 7th, 2009, 10:17 AM   #110
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Airlines post traffic rises but gloom remains

LONDON, May 6 (Reuters) - British Airways, Ryanair, and easyJet all posted passenger growth for April, but warned that Easter had provided a short term boost and the industry remained in the quagmire.

BA flew 0.9 percent more passengers in April than the same month last year despite a 17.7 percent slump in business travel, but admitted it was selling tickets at lower prices to fill its planes.

The company said its load factor -- a measure of how well it fills its planes -- rose 2.6 percent to 78.1 percent.

"We're sacrificing yield (prices) in order to keep volume," BA head of investor relations George Stinnes told reporters, adding that the airline had launched a 2-for-1 offer on business class tickets.

Low-cost carrier easyJet said earlier on Wednesday that April traffic rose 6.3 percent. Easter fell in March last year, inflating the April year-on-year figures.

It said bookings for the summer were about the same as last year, encouraging analysts, but remained cautious on the economy. A spokesman for founder and biggest shareholder Stelios Haji-Ioannou said he still takes the view that easyJet ordered too many planes for current market conditions and should continue to postpone deliveries.

Ryanair posted a 12 percent jump in April passengers while its load factor increased to 82 percent

"The low cost airlines continue to produce materially better numbers than full carriers. They are holding up while business-to-business traffic like premium or cargo travel is down," said Stephen Furlong, airlines analyst at Davy stockbrokers in Dublin.

British Airways shares were up 5.5 percent higher at 175 pence by 1507 GMT, while easyJet was off 4 percent and Ryanair was up 4.4 percent.

BA remains in merger talks with Spanish partner Iberia
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Old May 30th, 2009, 06:39 PM   #111
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Air cargo slump near bottom, no sign of upturn-IATA

ZURICH, May 27 (Reuters) - The slump in demand for air freight may have hit bottom, data from an airline industry body showed on Wednesday, but it warned there were no signs that a recovery was around the corner.

Air cargo demand tumbled 21.7 percent in April, the fifth consecutive month of a drop of more than 20 percent, but the pace of decline held steady, indicating that the worst of the downturn could be in the past, the International Air Transport Association (IATA) said.

"Freight remains at shockingly low levels. The worst may be over. However, we have not yet seen any signs that recovery is imminent," IATA Director General and Chief Executive Giovanni Bisignani said in a statement.

Demand for air cargo, a key barometer for the health of global trade, has dwindled as retailers have stopped ordering new stock due to the slump in consumer spending, while manufacturers have also curbed their production of new goods.

Air freight volumes are likely "to bounce along the bottom" until inventories adjust to more normal levels, IATA said.

Earlier this month, Bisignani told Reuters it would be necessary to wait another three or four months before it would be possible to tell if the situation was improving.

IATA, which represents 230 airlines including British Airways, Cathay Pacific and United Airlines, and Emirates, said international air passengers numbers fell 3.1 percent year-on-year in April.

IATA said earlier this month that passenger travel was likely to fall further and the number of people flying business and first class had fallen sharply in March, depressing fares and hitting airlines' revenues.

Privately-owned airline Virgin Atlantic warned on Tuesday the tough economic environment would make it "almost impossible" for airlines to make a profit in the current year.

The group also reiterated recent comments from rival British Airways that a slump in passenger numbers worldwide showed no signs of abating, making the current climate the toughest the industry has faced.

IATA has forecast that carriers are set to lose $4.7 billion this year as a result of the global recession that has shrunk passenger and cargo demand, after losses of around $8.5 billion last year.
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Old June 4th, 2009, 12:10 PM   #112
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INTERVIEW-IATA to raise 2009 airline industry loss forecast

KUALA LUMPUR, June 4 (Reuters) - Losses from the world's airlines will be worse than forecast this year and will cause a knock-on effect on suppliers, with Boeing and Airbus orders next year looking to be down 30 percent, the industry's top body said on Thursday.

International Air Transport Association (IATA) Managing Director Giovanni Bisignani told Reuters in an interview that the body would revise its forecast of $4.7 billion of losses at its annual meeting on Monday.

"We are going to revise them for the worse because the numbers we have seen in passengers and in freight are not showing any improvement," Bisignani said, adding that it would take 3-4 years before revenues recovered to pre-crisis levels.

The industry lost $8 billion in 2008.

"Freight has probably touched the bottom, it is minus 21 percent (year-on-year) since the last two or three months... but we do not see any kind of improvement. But the passenger (sector) where we generate 90 percent of our revenues is still roughly 10 percent down," he said.

Airlines carry 38 percent of the world's freight traffic and demand has been hit hard by the downturn that is expected to see global output fall by 1.3 percent, according to the International Monetary Fund.

While there has been a recovery in stock markets and in the oil price, this has not been matched by the prospects of a return to growth in the global economy, Bisignani said.

"We don't see any real recovery of the real economy... the goods traded around the world are still 21 percent lower," he said.

The price of oil recently hit a seven-month high of $69.05 and IATA's forecast of losses this year is based on oil at $50 a barrel. Oil at $50 a barrel would cost the airline industry $100-$120 billion this year, less than last year's $180 billion, IATA forecasts.

ORDERS TO DRY UP

According to Reuters estimates, some $500 billion of airline orders have been placed for this year. Difficulties in getting banks to finance purchases could see the number of planes delivered by Boeing Co and its European rival Airbus Industrie drop by 30 percent next year, Bisignani said.

"On the demand side (for planes), we have seen numbers dropping, in order to recover the same level of revenues we would take between 3 and 4 years, so probably there will be a shift in the need for capacity," he said.

The current downturn has hit carriers across the globe from wounded national giants like Deutsche Lufthansa and British Airways.

Even nimble budget airlines such as Ryanair which this week posted its first loss in 20 years thanks to a writedown on an investment in Aer Lingus, have cut fares in order to try to grow passenger numbers at the expense of national carriers.

Bisginani called for an end to sweetheart deals for some low-cost carriers which see them paying lower fees for airports, but rejected calls for a bailout of the airline industry.

"When an industry is losing billions and billions of dollars, we are not asking for bailouts, we are just asking, give us the opportunity to run this as a normal business and see if we are able to start making some money."

He said that a wave of industry consolidation would be unleashed if the U.S. ended ownership caps by foreigners on its airlines and said he believed the industry could create value for stockholders.

"The value chain shows that everybody makes money except the airlines. Manufacturers make money, make money in spare parts especially, airports make money because they run a monopoly service," Bisiginani said.
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Old June 22nd, 2009, 06:36 PM   #113
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Airline group IATA says weak economy, Easter shift, sent April premium traffic down
16 June 2009

MINNEAPOLIS (AP) - More evidence emerged Tuesday that a bad economy pushes passengers to the back of the plane, as a trade group reported that traffic in the high-end airline seats fell 22 percent in April.

Revenue from those passengers fell even faster, down an estimated 44 percent from April 2008, the International Air Transport Association reported.

The number of travelers on coach tickets rose 0.3 percent in April, which IATA said was an improvement over a 6.9 percent decline for the first quarter.

IATA pointed out that Easter landed in April this year versus March last year. The shift probably cut into higher-priced business travel but boosted leisure travel, IATA said. The group estimated that the Easter shift accounted for 5 percentage points of the decline in April premium travel.

Drivers of air travel such as jobs growth and industrial production were still declining in most big economies during April, "which would suggest a floor for air travel has not yet been reached," the group wrote.

Air travel has become much cheaper in recent months, with economy fares down 15 percent and premium fares down more than 20 percent, IATA said. That's because airlines are discounting tickets to try to keep them from going unsold.

Premium traffic in Europe fell 33.6 percent versus April 2008. Premium traffic within North America was down 16.5 percent, and traffic from Europe to Asia fell 26.4 percent.
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Old June 25th, 2009, 06:32 PM   #114
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Air cargo drops in May, recovery still far off-IATA

GENEVA, June 25 (Reuters) - Demand for cross-border air freight dropped 17.4 percent year-on-year in May, suggesting international trade is still a long way from recovery, a global airlines body said on Thursday.

The International Air Transport Association (IATA) said that passenger demand fell a more modest 9.3 percent year-on-year in May, and repeated its view that for airlines, "this crisis is the worst we have ever seen".

"We have lost several years of growth and yields are under severe pressure. Airlines are in survival mode. Cutting costs and conserving cash are the priorities," Giovanni Bisignani, IATA's director-general, said in a statement.

The latest reading of international air traffic includes the first estimate of the impact of H1N1 flu on airline travel.

Mexican carriers saw their passenger traffic fall nearly 40 percent in May, compared to a 9.2 percent drop among all Latin American airlines, said IATA, which represents 230 carriers including United Airlines , Cathay Pacific , Emirates [EMIRA.UL] and British Airways .

U.S. airlines also reported weak demand to Latin American destinations affected by the newly-discovered virus which has now spread to a global pandemic, the figures show.

Air cargo is a leading indicator for world trade, and equity markets are watching it closely for signs of economic recovery.

IATA said the 17.4 percent drop is a relative improvement compared to the 21.7 percent year-on-year fall in April, but remains far from full health.

It said although manufacturers have begun to add to their product inventories in anticipation of an eventual economic rebound, "inventories remain 10 to 15 percent higher than normal in relation to sales levels, indicating that a significant recovery is not expected in the near term".

Passenger traffic demand is slightly stronger than the 11 percent drop seen in March, indicating "a floor may have been reached," but it also has a long way to go, said IATA, which has estimated airlines will lose $9 billion in 2009.
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Old June 26th, 2009, 10:43 AM   #115
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IATA: May Air Passenger Demand Down 9.3% On Yr
25 June 2009

LONDON (Dow Jones)--The decline in global passenger demand in air travel appeared to have reached a floor in May, the International Air Transport Association, or IATA, said Thursday, but warned airlines still face a long haul to recovery.

IATA said passenger demand fell 9.3% in May from a year earlier. Freight demand dropped 17.4%, an improvement from the 21.7% drop in April.

The 5.0% cut in capacity wasn't enough to keep pace with falling demand and passenger load factors fell to 71.2%, down from 74.5% recorded in May 2008, IATA said.

IATA said figures suggested a floor had been reached and added: 'Although the impact of the recession appears to be stabilizing, strong headwinds from debt and low asset prices are expected to weaken and delay any significant recovery.'

'We may have hit bottom, but we are a long way from recovery,' said Giovanni Bisignani, IATA's Director General and chief executive.

Bisignani said airlines had lost several years of growth, with yields under severe pressure.

'Airlines are in survival mode. Cutting costs and conserving cash are the priorities,' said Bisignani.

He criticized airport operators and air navigation service providers for $1.5 billion in cost increases seen so far this year.

'It's irresponsible in the best of times and a completely unacceptable abuse of monopoly position in a crisis,' said Bisignani.
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Old June 26th, 2009, 07:32 PM   #116
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Small EU airlines say demand dropped 10 pct in first 3 months of 2009
26 June 2009

BRUSSELS (AP) - Europe's small airlines said Friday that passenger numbers dropped 10.7 percent in the first three months of the year as the economy downturn hit business and tourist travel.

The European Regions Airline Association said half of its member carriers -- which do not operate long flights across Europe or outside the continent -- saw fewer people fly, even airlines flying to Alpine ski slopes during high season.

Air Alps Aviation, which flys from Italy to Austrian resorts, posted a 44 percent drop in demand while Tyrolean Airways was down 11 percent.

Smaller airlines have boomed in recent years as the emergence of many low-cost carriers led to more people switching from road and rail to air travel.

Major European airlines reported a 9.5 percent drop in passenger numbers from January to March. Globally, airlines expect to lose $9 billion this year.
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Old June 30th, 2009, 06:49 PM   #117
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IATA: 60 Airlines Post 1Q Net Losses Totalling $3B
30 June 2009

LONDON (Dow Jones)--The International Air Transport Association, or IATA, Tuesday said that over 60 airline companies have already reported a net loss over $3 billion during the first quarter, adding that airlines are on course for a $9 billion loss for the year.

Those losses are mainly due to falling yields - average revenue per passenger - and total revenue, and were recorded before the recent rise in fuel prices.

Equity markets became more cautious on the airline sector during June, with the Bloomberg Global Airlines index falling 2% from May levels, which compared to a 0.9% rise in the FTSE Global All-Cap, IATA said.

IATA, which represents 230 airlines globally, said: "Market concerns are rising about the squeeze on airline cash flows being brought about by the substantial rise in jet fuel prices and the equally sharp fall in yields."

Tuesday, the front-month August light, sweet, crude contract on the New York Mercantile Exchange was at an eight month high at $73.38 a barrel.

Airlines continue to cut capacity, with available seat kilometers down 5% in May and available freight ton kilometers down almost 10%, but still can't keep pace with the falloff in demand.

Capacity cuts so far this year have been roughly half of the decline in volumes flown, IATA said, forcing both fares and yields to fall sharply in the last couple of months alone.
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Old July 10th, 2009, 02:59 PM   #118
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European Airline Passenger Traffic Dn 8.3% In May
10 July 2009

LONDON (Dow Jones)--The Association of European Airlines, or AEA, said Friday passenger traffic in May was down 8.3% and in the first half of June decreases were around 7.5% with falls of 5.5% in the second half.

MAIN FACTS:

-May Far Eastern traffic down 9.8%, North Atlantic 8.8%, and traffic in Europe down 7.9%.

-Overall seat-km in May 5.3% lower than previous year.

-May load factor down 2.4 points to 73.2%

-All but three of the 28 reporting airlines reduced capacity for May.

-Towards the end of June there were signs that load factors on European and North Atlantic routes had stabilised, although the Far East market remains very weak.
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Old July 10th, 2009, 06:42 PM   #119
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European airlines see no signs of recovery

PARIS/FRANKFURT, July 9 (Reuters) - Figures from Lufthansa , one of the world's biggest carriers of air freight, a key barometer of world trade, showed the airline slump continuing, while Air France-KLM braced for temporary lay-offs.

Continental Europe's largest airlines -- Lufthansa by market value and Air France-KLM by revenues -- were unable to point to significant signs of recovery in separate announcements on Thursday, though Frankfurt airport operator Fraport sounded a rare but still fragile note of optimism.

Germany's Lufthansa said shipments of cargo and mail fell 14.3 percent in June after 10 percent in May as a slump in economic activity continued to weigh.

"In the air freight sector ... the market environment remained weak in June," the German flag carrier said.

Passenger traffic retreated 5.2 percent in June, it said, though this was better than the 7 percent some analysts had feared, and an improvement on May's fall of 7.1 percent.

Cargo flows are under the spotlight as economists look for clues on physical trade movements. They have been hit both by economic weakness and a crisis over trade financing that G20 countries have promised to address by pumping in cash.

Just under half of international trade by value is shipped by air, according to airline lobbyists, and Lufthansa is the world's second-largest cargo network after Korean Air . When Air France and KLM, which merged in 2004 but still operate separately, are combined, they outrank Lufthansa.

FRAPORT MORE OPTIMISTIC

Fraport said it had become slightly more optimistic about 2009 after a slump in passenger traffic had eased in June.

It will release the figures on Friday.

In the United States, airlines saw steep declines in traffic in June, a sign that demand remains weak and that carriers are likely to post second-quarter losses.

Germany has been the world's biggest exporter of goods since 2003 but has been hit by a slump in exports this year.

In mixed economic data on Thursday, Germany said it might have already emerged from recession, but U.S. unemployment data failed to cheer markets.

TEMPORARY LAY-OFFS

Air France-KLM Chief Executive Pierre-Henri Gourgeon told a shareholders' meeting the Franco-Dutch group may impose temporary lay-offs to cope with recession as it saw no signs yet of a recovery in travel demand.

"Air France-KLM must remain competitive. I haven't excluded temporary lay-offs. We will watch very closely. These measures should allow us to avoid affecting employment," he said.

In May Air France-KLM said it planned 3,000 job cuts in the financial year to end-March 2010 through natural wastage.

The world's airlines lost more than $3 billion in the first quarter of 2009, airline lobby IATA said last week, maintaining its estimate for full-year losses of $9 billion.

Airlines say there is little way of knowing how business trends will develop in the second half of the year and are conserving cash or merging to survive, while a rebound in oil prices looks set to delay profits when the recovery happens.

At $61.7 per barrel on Thursday, North Sea Brent crude futures <LCOc1> have risen 56 percent since mid-February, but they are still less than half their peak of $146/bbl a year ago.

Merger talk was rekindled on Thursday when the chairman of Spanish airline Iberia stepped down and was replaced by proven dealmaker Antonio Vazquez.

Vazquez, who oversaw the sale of Altadis to Britain's Imperial Tobacco in 2007, could put new life into merger talks with British Airways , which have been bogged down for a year, analysts said. [ID:nL9627060]

Vienna airport operator Flughafen Wien said passenger traffic fell by 10.5 percent in June as traffic to eastern Europe declined by almost 20 percent.

The June decline was less severe than in the first five months of the year. Year-to-date traffic declined 12.7 percent.
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Old July 10th, 2009, 08:26 PM   #120
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Running on empty
4 July 2009
The Economist

ON JULY 1st Lufthansa finally took control of BMI, the second-biggest carrier at Heathrow airport. But the only person celebrating was Sir Michael Bishop. A fortnight earlier the 67-year-old entrepreneur had forced the German airline to honour a decade-old put option to add his 50% stake to the 30% it already held, albeit at a lower price: £223m ($368m) rather than £292m.

That the deal had to be imposed on Lufthansa, almost literally on the steps of the High Court in London, was a sign of the times. Until quite recently, the chance to acquire BMI’s 11% share of take-off and landing slots at Heathrow would have been enviable. In 2007 American airlines, eager to take advantage of new “open skies” rules, were paying up to £25m for each pairing of slots. But these days, faced with one of the most savage downturns in the history of a notoriously cyclical industry, Lufthansa is desperately trying to conserve cash and cut capacity to match plunging demand.

The airline recently warned that without fierce cost-cutting measures it would fail to make even an operating profit this year. In the first four months of 2009 its premium traffic fell by 15%, while traffic within Europe dropped by 37%. Blair Pomeroy, of Oliver Wyman, a consultancy, points out that the last thing Lufthansa needs just now is to spend precious money and management time trying to sort out a struggling, sub-scale airline such as BMI.

It shows just how bad things are if even Lufthansa, one of the world’s most powerful airlines, cannot see how to make money by bulking up at Heathrow, one of the most coveted bits of real estate in aviation. According to IATA, the trade body that represents most of the world’s airlines, the industry is on course to lose $9 billion this year. Although passenger volumes appear to have bottomed out and freight recently recorded a small increase, IATA’s boss, Giovanni Bisignani, fears that the worst is yet to come and that once the summer holidays are over the crisis will intensify.

The problem, according to Brian Pearce, IATA’s chief economist, is that “fares and yields are still collapsing” in most of the world because capacity cuts have yet to catch up with the fall in demand. Deliveries to airlines that ordered new planes near the top of the cycle are running at a rate of about 100 a month and will continue at that pace well into next year because the penalties for late cancellation are so high. It is also hard for airlines to mothball planes they are still paying for. American majors were able to slash capacity much faster than their European and Asian counterparts because many of their elderly planes were fully depreciated. In just a few months last year, United Airlines grounded nearly 100 of its elderly Boeing 737s.

Another anxiety is the price of jet fuel, which has risen by nearly 50% since the beginning of the year and by over 30% since early May. Mr Pearce says that his forecast assumes oil at $65 for the rest of the year—five dollars below the level it reached this week. Each extra dollar adds $1.6 billion to the airlines’ costs.

If cash continues to evaporate at its present rate, even the strongest airlines will need to raise money. But the price they will pay for it could cripple them for years. Even airlines with healthy balance sheets, such as American and Southwest, are having to pay 10-11% on secured debt. United offered a yield of 17% on $175m worth of debt issued last week.

Sir Richard Branson, the founder of Virgin Atlantic, has mischievously suggested that his old rival BA could go bust. Aviation analysts think that unlikely. But its chief executive, Willie Walsh, admits it is facing a “fight for survival”. In the last financial year, BA recorded its worst-ever loss: £401m, £331m of which was chalked up in the first three months of 2009. The airline was getting through £2.7m a day in February and had cash reserves of less than £1.4 billion at the end of March.

Usually, about 65% of BA’s profits come from its routes across the North Atlantic, most of it from passengers paying a £4,000 business-class fare to New York. So far this year, BA’s premium traffic is down by about 17%—hardly surprising when much of it used to come from deal-chasing bankers. Mr Walsh is right to be fearful, particularly if unions balk at his plans to cut 3,500 jobs and opt to launch a summer of strikes.

IATA’s Mr Pearce sees some signs of recovery in Asia. But he expects only a long, hard grind for airlines in Europe and America. European regional airlines, squeezed on one side by low-cost rivals like easyJet and Ryanair and on the other by the big network operators, such as Air France-KLM and Lufthansa, are especially vulnerable. Although overstretched by the acquisition of BMI and two smaller airlines, Lufthansa is strong enough to weather the storm better than most. But not as well as Sir Michael, who realised some time ago that the best way of making money from the airline industry was to leave it.
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