Big Losses Predicted for European Airlines

by Alister POOLE on September 1, 2009

The International Air Transport Association recently released a report that shows staggering losses for the European airline industry in the year of 2009.  With concerns over the global economy joining forces with fear over the swine flu outbreak, travelers have increasingly been staying home and the airline is feeling the sting to the tune of 9 billion dollars in losses according to the forecast by the International Air Transport Association.  These numbers represent nearly double the losses predicted in the original forecast, which have some in the industry wondering about the future of air travel in Europe.

Budget airlines are doing the best but still reporting huge losses in the first half of the year, a fact that has many airlines cancelling flights and cutting jobs.  Airlines like Air France, Deutsche Luftansa, and British Airways are all warning that their original forecasts for the year might have been way off, and that decreasing revenue per passenger is a much more serious issue than they once predicted.

“We don’t expect the economy to improve in the near-term. Demand will stay weak and average revenue per passenger will stagnate at best,” said Stephan Gemkow, Chief Financial Officer of Deutsche Luftansa.
The recent boosts in airport taxes have not helped, with some budget carriers like Ryanair and EasyJet choosing to pull flights from airports who have raised their fees.

The above quote comes from the Wall Street Journal.  Please visit their website for more details.

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