"World's airlines likely to lose $5 billion this year"

Wednesday, November 3, 2004

Airlines likely to lose $5bn  
South Africa - The Star


Scarborough, Tobago - The global airline industry would lose about $5
billion (R31 billion) this year, and more bankruptcies of carriers were
likely, due in part to rising fuel costs, an International Air Transport
Association official warned this week.

"We expected to have a profit this year, but we will have a loss, worldwide,
[of] around $5 billion this year instead of $3 billion profit," said
Patricio Sepulveda, the association's vice-president for Latin America and
the Caribbean.

Sepulveda said fuel accounted for 18 percent of the operating costs of
airlines, compared with 16 percent in 2002.

The global industry group has in recent weeks predicted losses of between $3
billion and $4 billion but has warned that rising fuel prices could push the
figure even higher.

The forecast comes despite rising global passenger traffic, which was up
17.7 percent in the first nine months this year compared with a year ago.

And it was higher passenger numbers that had helped Irish budget airline
Ryanair increase earnings by 14.9 percent in the latest quarter despite
rising fuel costs, the company said.

But the carrier's outlook for the rest of the year was "cautious" because of
the high price of oil, which it predicted would lead to a "bloodbath" for
its rivals.

Ryanair said net profit for the three months to September was 147.6 million
euros (R1.2 billion), up from 128.4 million euros in the same quarter last
year. Earnings per ordinary share were 19.31c, up 15.2 percent.

Fuel costs rose 41.7 percent in the second quarter to 61.9 million euros,
but passenger numbers rose 24 percent to 14 million.


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