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Airline Losses To Near Double To £5.6bn This Year, Says Iata Chief

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http://www.telegraph.co.uk/finance/newsbys...IATA-chief.html

According to the latest projections by the International Air Transport Association, major carriers will lose £5.6bn compared to £2.9bn in 2008.

The continuing grim economic outlook has dominated the annual industry summit in Kuala Lumpur with Giovanni Bisignani, IATA's director general, describing the global economic collapse as unprecedented.

According to Mr Bisignani airlines are set to see their revenue fall £49.6bn - or 15pc.

"That is the total revenue that will disappear with falling demand, collapsing yields, broken consumer confidence and pandemic fears," he said. "The landscape is harsh".

The industry fears that the latest recession could see an irrevocable decline in the number of premium business passengers, upon which airlines depend for much of their revenue.

"Business habits are changing and corporate travel budgets have been slashed. Video conferencing is now a stronger competitor," Mr Bisignani added.

"There is no modern precedent for today's economic meltdown. Cargo remains a good leading indicator and its 23pc freefall in December was a clear sign that the global economy was collapsing."

The only glimmer of hope for airlines has been the prospect of falling fuel prices with industry expecting to spend £36.6bn less on oil in 2009 than last year.

But even this could at risk, Mr Bisignani added. "The risk that we have seen in recent weeks is that even the slightest glimmer of economic hope sends oil prices higher.

"Greedy speculation must not hold the global economy hostage," he said.

Once again he singled out BAA, the operator of Britain's major airports for criticism, putting it - alongside the Civil Aviation Authority - at the head of the industry's "wall of shame", because of a planned 86 per cent rise in charges by 2013.

Look like over capacity is a b1tch again.

Doesn't look like a recovery on the horizon.

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Once again he singled out BAA, the operator of Britain's major airports for criticism, putting it - alongside the Civil Aviation Authority - at the head of the industry's "wall of shame", because of a planned 86 per cent rise in charges by 2013.

That's what happens when you have a monopoly, thankfully the Competition Commission have decided to do something about it: They are forcing BAA to sell both Gatwick and Stansted, and one of either Glasgow or Edinburgh.

Owned and operated by BAA

  • Aberdeen Airport
  • Edinburgh Airport
  • Glasgow International Airport
  • London Gatwick Airport
  • London Heathrow Airport
  • London Stansted Airport
  • Southampton Airport

Selling

  • London Gatwick Airport
  • London Stansted Airport
  • Edinburgh Airport or Glasgow Airport - to be confirmed.

After an enquiry from August 2008–March 2009, the UK Competition Commission announced that BAA will be forced to sell three of the seven UK airports it owns. Gatwick, Stansted and one of either Glasgow or Edinburgh airports within two years over fears the monopoly position held by BAA over London and Scotland's airports could have “adverse effects for both passengers and airlinesâ€. The sales are likely to raise between £3.5bn and £4bn.

(All from http://en.wikipedia.org/wiki/BAA_Limited)

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I think the airlines will be in longterm decline. 90% of air travel is business and government.. and the big business bureaucratic behemoths who are the heavy users, are crumbling in this downturn. As they simply can't adjust their overheads/costs downwards.

Also teleconferencing/virtual reality is going to become more compelling and cheaper each year. If by 2025 half of air travel business meetings done today, are instead done by teleconferencing what will that do to the airlines?

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