Excerpted from Wired Blog Network “Airlines to Lose $5.2 Billion Worldwide This Year” September 8, 2008
Things keep going from bad to worse for the global airline industry, which has taken such a beating from rising fuel prices that it expects to lose a staggering $5.2 billion dollars this year — with U.S. carriers accounting for almost all of the red ink.
That bit of cheery news comes from the International Air Transit Association, which says “a toxic combination” of sky-high fuel prices and plummeting demand “continues to poison the industry’s profitability.” More than 25 airlines have gone under this year…It’s a stunning turnaround for an industry that saw a $5.6 billion profit in 2007.
The industry attributes its free-fall to the price of oil…fuel bills have jumped $50 billion this year to an estimated $186 billion. Jet fuel now accounts for 36 percent of the industry’s costs, up from 13 percent just six years ago…
The recent drop in fuel prices have brought a measure of relief to the beleaguered industry, but it might be a double-edged sword…
U.S. carriers took the biggest hit, accounting for $5 billion of the projected losses…Don’t expect next year to be any better. Fuel could account for 40 percent of the airlines’ costs next year, and the IATA predicts the industry will lose $4.1 billion in 2009.
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Full article:
http://blog.wired.com/cars/2008/09/airline-haters.html
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