Airline Industry Eyes Recovery

Airlines and their suppliers are reporting tentative signs that a severe industry recession is bottoming out.

At the Asian Aerospace expo in Hong Kong, Airbus‘ Chris Buckley said last week that more industry consolidation was possible before a rebound next year.

[Christopher Buckley, Exec. VP, Airbus]:
„We still sense in the coming months we’ll see a little more consolidation. You know that various airline groupings are going to come a little closer together. I can’t comment on whether there are going to be many more bankruptcies. I fear there maybe with smaller airlines, one or two more failing during the winter. But our prognosis is that passengers around the world are still there, people are still wanting to travel, so let’s be optimistic and as we go into 2010 we’ll have turned a corner.“

Airbus and rival Boeing Co are headed for their worst annual order tally in at least 15 years as airlines cancel or defer almost as many planes as they buy.

Airlines around the world are building scale and tapping into growth regions, after the global economic crisis caused billions of dollars in losses, said Boeing’s Randy Tinseth.

[Randy Tinseth, VP Marketing, Boeing Commercial Airplanes]:
„The good news is that the airlines have worked very hard to adjust capacity in the market place so it matches the real demand, they’ve worked hard to cut costs and in many ways they’ve worked better together so they’ve seen alliances grow, so the airlines continue to grow but in a virtual way.“

Another risk again once an economic recovery is established is fuel costs, said Boeing’s Tinseth.

[Randy Tinseth, VP Marketing, Boeing Commercial Airplanes]:
„To put it in perspective, every one dollar change in the price of oil translates into a billion dollars in cost difference for our industry so we are working very hard to make sure we have the best and the most fuel efficient aircraft.“

Global airlines will likely post nine billion in losses this year, of which about three billion will come from Asia-Pacific carriers.

(NTDTV)