Boeing’s 747-8 is both a passenger and freighter plane. It was supposed to be in the market last year itself, but the prevailing worst postwar conditions forced the delay. According to the International Air Transport Association (IATA) the passenger demand fell to 3.5% last year. Moreover freight demand fell down by 10 percent with a load factor of below 50 percent. As reported by the IATA, because of excessive aircraft delivery in the market profit will continue rising.

Airbus 380 is giving a tough competition to all the existing airplane manufacturers in the market. As reported by Boeing, it has succeeded in selling only 108 aircrafts.

There is a hope for jumbo jet technology in the near future when the economy stabilizes. According to Boeing, 747-8 is around 10 % less costly than the exisiting 747-400 and the company has all intentions to replace it with the newer one. 747-8 engines manufactured by General Electric also produce fewer emissions as compared to the previous one.

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BA chief executive Willie Walsh said it is an impact of company’s capacity reduction and cost cuts and according to him it shows the impact of permanent changes across company policy. He also said the British Airways has adapted to the global recession. He further explained the reasons behind the 10.5 percent decrease in their operating costs are external spending cuts and capacity reductions.

On the other hand rival Air France has reported stabilized business, but according to experts its 2010 estimates are quite high. Finnair, the Finnish national carrier, has gone through loss in the last fourth quarter and announced that it is expecting future losses in this quarter also.

For BA the revenues fell down to 12.9% of GBP£6.14 billion. It has faced an operating loss of GBP£86 million for the first time during last year.

According to the International Air Transport Association (IATA) this sector will face many challenges this year including new security issues.

BA reported lower cabin class sales and surcharges which in turn caused 8.8% fall in the third quarter. The airline also reported a decrease in its business class passengers by 2.1 percent and a total of 7% decrease in the month of January. BA has announced its merger agreement with Spain’s Iberia airline.

Whereas other low-cost competitors like Ryanair and easyJet have reported profits in their forecasts and said they are still able to make their market share from BA and Air France-KLM.

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Low yields and rising costs are an ongoing disaster for global airlines, who have already lost $49 billion since 2000, according to the International Air Transport Association.  The industry group retained its estimate of $11 billion full year losses for this year.

As a guy who pays the bare minimum of rent in Chicago by living in an attic, I can’t even fathom that kind of money. Maybe someone much smarter than myself could explain to me how this is possible. I mean, normally if a business loses money, it goes out of business. How are the airlines staying in business when posting those kind of loses? As cheap as I am, I cut my loses and run if I lose so much as a dollar.

Passenger volume dipped by 4.1 per cent, from the already-low levels reached in 2008 when financial markets collapsed, and premium fares dropped the most.  Cargo traffic also took a beating, with a drop of 13 per cent.

IATA said it predicts passenger traffic to rebound in 2010 by 4.5 per cent, with nearly 2.3 billion travelling.

I suppose it’s good that the airline folks are being somewhat optimistic, as opposed to what I do when I lose any kind of money, which is cry in the fetal position and look at the homeless shelter as if I’m about to meet my brethren (I overreact sometimes), but I think I’ll quickly play Devil’s Advocate.

The Obama administration and state governments have been looking into high-speed trains, much like what China has been rocking out for a few years now. I know that if a high-speed train connected Chicago to my hometown of Cleveland, I would abuse it to no end, never using a flight again. I imagine others would, as well, especially those who aren’t so fond of being above clouds and can’t understand how something so heavy can stay afloat (me being one of those people, if you couldn’t tell).

I think the airline industry has quite a ways to go before the skies are clear (bad pun intended).

[via Fly]

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In his newsletter, Bisignani applied to ministers of transport, heads of state and environment ministers in order they could assist “to make Copenhagen a success” for the airline industry as IATA was not able to be the only campaigner.

But the airline industry has a big number of denial, delay and inactivity for that reason many UNFCCC delegates are not ready to believe that IATA or the International Civil Aviation Organization(ICAO), the UN agency for civil aviation will contribute to curtailing greenhouse gas emissions from the sector.

Both the aviation industry and the shipping industry became the most unruly industry sectors when talking about global warming.

In late 1997 the Kyoto Protocol stated the following: emissions of greenhouse gases should follow restriction or reduction from the aviation sector by means of ICAO. Later little progress was seen as there were made changes by ICAO. But according to the recent United Nations Framework Convention on Climate Change report, international aviation emissions of developed countries increased by 65.8% during the period of1990 and 2005.

Also IATA accepted a four-pronged public relations strategy in order to smooth concern over its environmental influence. It was decided to promote the growth of fuel efficiency as well as to hype the fact that some of its member companies provide passengers the option to take part in a carbon offset program. The association also targeted at securing the support of International Civil Aviation Organization in order IATA was able to implement four-pillar strategy of investing in technology, flying planes effectively, building effective infrastructure as well as utilizing economic measures.

IATA airlines introduced a bold-sounding strategy in June 2009. The aim of the strategy was to design the image of resolute action by the industry.

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Such countries as Chile, Malaysia, Panama, Singapore, Switzerland, the United Arab Emirates, and the United States decided to join the European Commission which meant that the countries supported the establishment of new guidelines for commercial aviation.

According to the Montreal-based International Air Transport Association (IATA) those who signed the agreement will be able to enter into global capital markets as well as diminish market access limitations and also airline companies will get more freedom in establishing seat prices. Furthermore, it was added that the United States acceded to think about the possibility of a multilateral agreements in order to forgo ownership limitations.

“This is an historic achievement that will help set the foundation for a financially sustainable global aviation industry,” said Giovanni Bisignani, the general director of IATA. He also said that the environment should develop and it should become more liberal.

A spokesman considered that the IATA pressed down on member governments, i.e. the company promised to remove ownership caps and provide cross border mergers and purchases.

According to Steve Lott, IATA spokesman, there were a number of national abortions, but still there were no mergers with foreign airlines. For that reason it was time to create a multinational airline.

One should say that the airline sector was divided into parts that led to the inability to cover its capital for 65 years. Moreover, it was estimated that the airline industry lost $US53 billion ($A56.75 billion) since 2001.

The rules of National possession averted absorptions of airline companies and, besides, market access was limited till cross-border services were approved by the governments in bilateral pacts.

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According to IATA the vivid growth was considered to be dissembling as it was compared with a very poor period in 2008, at that time passenger traffic decreased by 2.9 per cent as well as cargo dropped by 7.7 per cent.

It was estimated by statistics that from August there was a drop of 0.3 per cent in passenger volumes. As established, this resulted in a pause in the economic recovery not only in the United States but also in other countries.

Giovanni Bisignani, IATA general director, said that it was too early to identify the slight improvement as a recovery. He also added that yields were still not in a good position and costs increased.

Non-fuel costs as well as oil prices are going up. At the beginning of the year oil prices were US$43 per barrel, now they are considered to be $75 per barrel.

But still one can see some improvements in passenger demand, it is five per cent better in comparison with the low point that was in March 2009 but at the same time it is six per cent below the peak in early 2008. The situation concerning demand in North American remained the same from August, i.e. 2.4 per cent decrease from a year earlier.

As for Europe, demand dropped by 4.2 per cent in September while in August it was 2.8 per cent. Partially it was caused by the loss of short-haul market share to low-cost carriers.

But serious improvements were shown by Asia-Pacific carriers. Demand raised by2.1 per cent in September despite the fact that there was 1.6 per fall in August.

As far as Middle Eastern demand is concerned, it increased by 18.2 during the year but because of Ramadan that was in August this year, the number was falsified.

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According to Giovanni Bisignani, IATA chief executive, $80bn will vanish from the industry’s top line and it will take years in order to retrieve 15 per cent of lost revenue.

Airline companies try to merge but as a matter of fact they are confronted with normative barriers. For that reason the have decided to coordinate schedules and ticket prices on busy routes that can help them strengthen their businesses

One should say that during 30 years the airline industry has been unsteady. This fact can be explained by the following reason – the price of an airline seat has dropped estimably. In order airline companies do not file for bankruptcy, the new alliances were built up.

Two alliances such as Star and SkyTeam received antitrust immunity by the US Department of Transportation. At the end of this week the third alliance known as OneWorld will be given a preliminary ruling on its application for immunity.

It became known that the Star Alliance has 41 per cent of the market when at the same time SkyTeam has 29 per cent and OneWorld has 20 per cent.

Willie Walsh, BA chief executive, was sure that the alliance OneWorld would receive the permission despite the fact that it had 2 attempts to forge an alliance that was in 1996 and 2001 but were discarded as according to regulators the companies had to give up a big numbers of slots in order the carries could prosper.

The only way for BA, AA and Iberia to prove to Brussels that they have the financial benefits is that the planned alliance OneWorld will not depend on the expense of consumers.

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According to the International Air Travel Association (IATA) the world airline industry faces high competition and rising oil prices, which will cause the loss of $ 27.8 billion (£ 16,9 billion) in 2008 and 2009.

It is expected that IATA, having 90 percent of the airline industry that includes main airline companies such as British Airways and American Airlines, will not change tickets prices till 2013 as they are considered to be low.

Ryanair, the Europe’s largest budget carrier, forecasted the drop of the cost of airline tickets by 20 percent in spite of the fact that it is going to enlarge its fleet. According to IATA, airfares will go down 12 percent this year.

Giovanni Bisignani, the chief executive of IATA, supposed the $ 80 billion revenue loss was due to a drop of passenger numbers and a weak growth in the cost of tickets. He forecasted that the situation would not change until 2013.

Firstly, IATA estimated $ 9 billion loss but the total airline industry’s loss is $ 11 billion. Despite the fact that passenger numbers will go down 4 percent, a two-year loss will be $27.8 billion

It is expected that the world travel industry will lose $ 3.8 billion in 2010 because of rising fuel costs that account for up to a third of carrier’s overheads.

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