Airlines Struggling to Climb Out of Recession
Thursday, January 28, 2010 8:11Airline passenger numbers plummeted so steeply in 2009 that oxygen masks may soon be tumbling out of boardroom ceilings across the globe. As demand for seats dropped by 3.5%, chances of an early recovery disappeared quicker than a complementary gin and tonic.
An industry group said that, with airlines struggling to fill more than three quarters of seats, any signs of profit have been delayed and another year of heavy losses is scheduled. International Air Transport Association said that, with demand falling 10.1% year-on-year and filling less than half of available capacity, freight carriers fared even worse.
In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen. The fall in demand began to level out toward the end of 2009, partly as a result of airlines cutting flights to avoid empty seats, but yields still remained 5-10% below 2008 levels. And the group estimated that the industry is set to lose a further £3.5 billion this year. This is likely to be another Spartan year for airlines, marked by careful capacity control and cost reduction.
Fresh calls to increase security after the attempted bombing of a Detroit-bound flight on December 25 has put extra pressure on the troubled industry. And it should be governments, not airlines, which pick up the bill for the extra security measures.
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