Airline Industry Profits, but Not in Europe

According to the International Air Transport Association, global airlines will be forecasting a profit.
Airline Industry Profits, but Not in Europe
6/7/2010
Updated:
10/1/2015
<a><img src="https://www.theepochtimes.com/assets/uploads/2015/09/airplane100367787.jpg" alt="GROUNDED: A Lufthansa and British Airways passenger jets taxi onto the runway before taking off from London Heathrow Airport on May 24. The European airlines may struggle after losing millions in revenues due to volcanic ash. (Adrian Dennis/Getty Images)" title="GROUNDED: A Lufthansa and British Airways passenger jets taxi onto the runway before taking off from London Heathrow Airport on May 24. The European airlines may struggle after losing millions in revenues due to volcanic ash. (Adrian Dennis/Getty Images)" width="320" class="size-medium wp-image-1818956"/></a>
GROUNDED: A Lufthansa and British Airways passenger jets taxi onto the runway before taking off from London Heathrow Airport on May 24. The European airlines may struggle after losing millions in revenues due to volcanic ash. (Adrian Dennis/Getty Images)
According to the International Air Transport Association (IATA), global airlines will be forecasting a profit of $2.5billion for 2010, which would be a complete turnaround from the March estimated figure of $2.8 billion in losses.

The ash cloud from Iceland’s volcano that grounded more 100,000 flights around the world has resulted in European airlines losing $2.8 billion, IATA said.

“The global economy is recovering from the depths of the financial crisis much more quickly than could have been anticipated. Airlines are benefiting from a strong traffic rebound that is pushing the industry into the black,” IATA CEO Giovanni Bisignani said in a statement at the organization’s annual meeting in Berlin. “Airlines are benefiting from a strong traffic rebound that is pushing the industry into the black.”

The gains in 2010 will be a dramatic change to the losses that have occurred over the last two years. This marks the first profit for the airline industry since 2007 given the impact of recession, terrorist threats, epidemics, and warfare. Nevertheless, the outlook for Europe appears to be a continual downward trend for 2010.

The international industry trade group of airlines reported that passenger traffic has jumped 7 percent and cargo traffic has grown 18.5 percent, which is directly related to companies moving and restocking inventory. Moreover, fares are predicted to rise by 4.5 percent for passengers and cargo business.

A notable change is also premium travel, which had taken a dive with high-end boutique airlines defaulting and business travelers opting to rely on thrifty alternatives.

“Luxury air travel has essentially been grounded,” said Peter Yesawich, CEO of the travel marketing company Ypartnership, in an interview with Reuters. “One of the first prerequisites to go in a tough economy.”

It seems the larger brand names such as Delta Airlines and British Airways are investing in facilities such as onboard showers, flat seats for sleeping, and Internet access in order to attract business travelers.

However according to the IATA, demand for high end travel is beginning to show signs of improvement in various regions.

The ongoing strikes that British Airways faces, which cost an estimated $10.1 million per day, will be a drag on the company’s finances. The financial drain will no doubt dent the company’s financial health. The ongoing saga over pay and work conditions has been a lengthy process for Britain’s flagship airline.