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Global airline industry to halve losses but crisis looms: IATA
By Roland de Courson
AFP
TOKYO
Petroleumworld.com 08 31 06
The global airline industry is set to almost halve its losses in 2006 but a crisis is brewing over US security measures that could stop thousands of people flying, the industry's top body said Thursday.
The International Air Transport Association warned that up to 105,000 people a week could be stopped from taking to the skies unless the United States and the European Union strike a deal over the supply of passenger information.
After a loss of 3.2 billion dollars in 2005 as fuel prices rose sharply, the industry is now expected to remain in the red to the tune of 1.7 billion dollars this year, much less than the 3.0 billion previously feared, IATA said.
Stronger-than-expected economic growth has boosted airlines' revenues, while restructuring has helped to reduce overcapacity, said IATA, which represents some 260 airlines.
The reduction in red ink comes despite an increase in the predicted price of oil for this year to 68 dollars per barrel on average -- giving the industry a total fuel bill of 115 billion dollars --- from 66 dollars previously forecast.
IATA director general Giovanni Bisignani attributed the improvement to "efficiency, hard work and a strong revenue environment."
The North American industry has recovered significantly and is expected to return to operating profit this year while European airlines should see rising earnings, Bisigani told reporters in Tokyo.
Asian carriers, on the other hand, could suffer small profit falls.
"Overall, the industry has never been so lean, mean and well poised to return to profitability," Bisignani remarked.
At the same time, he warned that a US economic slowdown was a "major threat" to airlines' efforts to avoid a loss.
The global airline industry went into a tailspin after the September 11, 2001 terrorist attacks on New York and Washington using hijacked airliners. Skyrocketing fuel costs progressively added to the carriers' woes.
Bisignani said the United States and EU must also make quick progress on resolving the security issue of passenger information or risk seeing thousands of travellers kept on the ground.
The EU's top court in May scrapped a decision forcing airlines to supply data on European passengers to US authorities as part of a security crackdown in the wake of the 2001 attacks, giving them until September 30 to reach a new agreement.
"The US and Europe must move quickly to avoid a big potential crisis over the Atlantic in the following weeks," said Bisignani. "Failure to agree by September 30 could ground up to 105,000 travellers a week."
The European Commission, the EU's executive body, wants a new deal after the European Court of Justice quashed the previous agreement, ruling that it was "founded on an inappropriate legal basis."
Under the old agreement, airlines were required to provide the US authorities with more than 30 pieces of data on passengers and crew, including credit card information, addresses and telephone numbers, 15 minutes before departure.
The EU-US accord was reached in 2004 as a number of aircraft were being prevented from entering the United States over concerns that suspicious passengers were aboard. The deal was lambasted by civil liberties' and privacy groups.
AFP 31 0831 GMT 08 06
Copyright ©2006 AFP. All Rights Reserved.
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