World aviation

Sequestration to cripple air travel, cargo, according to study

An economic study released Monday shows the predicted negative impact on U.S. air travel, including Colorado's bustling airports, if Congress fails to create an alternative solution to January's automatic budget cuts.

Denver Post,

13 August, 2012

The independent study is one in a series commissioned by Aerospace Industries Association. It estimates that the cuts to the Federal Aviation Administration's operations will result in a loss of up to 132,000 aviation jobs and a reduction of $80 billion each year from the national GDP.

The findings predict a decrease in capacity of nearly 2 billion pounds of freight and 37 to 73 million passengers annually. Additional losses could be felt in the closure of air traffic control towers and layoffs of TSA screening agents.

For article GO HERE

Europe: Ticket prices set to soar as airlines chase profits

The days of really cheap air travel are numbered, Germany’s air travel industry association has warned, saying that airlines needed to increase their profits to remain solvent.

The Local,

14 August, 2012

“Flying is going to become more expensive,” said Klaus-Peter Siegloch, president of the German Air Transport Industry (BDL). The time of “very cheap tickets is nearing an end,” he told Monday’s Hamburger Abendblatt newspaper.

“The average profit must increase if we want to have solvent airlines in the future,” he said.

Lufthansa and Air Berlin, the two biggest German airlines are both having difficulty, and are struggling to reduce their costs. Lufthansa made a loss of €168 million in the first half of this year, while Air Berlin was €66 million in the red in the second quarter of the year.

For article GO HERE

Struggling Malaysia Airlines says Q2 loss narrows

Google,

13 August, 2012

KUALA LUMPUR — Malaysia Airlines on Tuesday reported its sixth straight quarterly loss on forex losses and declining revenue, but said recent cost-cutting steps were showing signs of paying off.

The struggling national flag carrier narrowed its loss in the second quarter thanks to lower fuel costs but remained firmly in the red, losing 348.7 million ringgit ($111.7 million).

The airline -- which reported a 2.5 billion ringgit full-year loss for 2011 -- had announced in June it was pushing back a planned 2013 return to profitability after a tie-up with rival budget carrier AirAsia crumbled.

The latest results will add to the gloom surrounding the airline, which has struggled to remain in the black, with analysts blaming a history of poor management, change-averse unions, government interference and other factors.

For article GO HERE

Global aviation riddled by economic misfortune

Business Recorder,

August 06, 2012

The latest word from International Air Transport Association (IATA) on the monthly traffic progress of the global aviation industry speaks volumes about the state of the industry.

Where air travel worldwide is now aiming for a soft landing, thanks to dreary consumer and business confidence, the air freight markets continue to paint a gloomy future.

Aviation industry is fragile, and it remained susceptible to the economic cycles during CY11. Even though the passengers demand was increasing during the year, and international and domestic air traffic grew by 5.9 percent compared to the historical range of 4 - 5 percent, the profitability of the industry dropped significantly by 50 percent YoY during CY11 primarily on account of fuel cost. Net margins grew by a tad; 1.3 percent on the back of an increase of almost 41 percent in average per barrel price of oil.

Regionally, Latin American airlines witnessed the biggest YoY growth of around 11 percent while the African markets didn garner much during CY11. Growth in Asia Pacific region was moderate at 5 percent but waning in comparison to CY10. Individually, Chinese, Indian and Brazilian airlines expanded the most.

On the other hand, the mature markets like United States hardly existed on the growth map. A varying trend that kept the fragile aviation industry afloat through the choppy recessionary waters of CY11 was the growth in first-class and business-class travel overtaking the economy-class, as highlighted IATAs Annual Review.

This was true for the trans-Pacific and trans-Atlantic markets due to increased business travel.

On a fragile avenue, global air transport continues to grapple with the eurozone debt dilemma and the rising fuel prices even today.

With progressive bail outs and further deterioration in the euro region, restoration of consumer confidence is nowhere in sight. In such times, the greatest challenge for the airlines and the industry is their tussle with revenues and costs for margins.

Further, the climate targets of IATA consist of increasing the fuel efficiency by 1.5 per annum up till CY20, capping net carbon emissions from CY20 and decreasing carbon emissions by 50 percent in CY50 from those of CY05.

The commercial viability of this alternate fuel in the long run has its qualms which require cooperation amongst all stakeholders.

Half of CY12 has gone by, and there has been no sign of abating of the eurozone debt crisis or the oil market drama.

Where the global aviation has been a victim of exogenous factors and falling consumer demand, a stark reality for Pakistans aviation sector is its own structural injuries, beside the universal threats.