AIRLINES TO DITCH 60 MILLION SEATS IN 4TH QUARTER
07 August 2008
Steve Creedy
THE world's airlines will offer almost 60 million fewer seats in the fourth quarter of this year than they did a year ago as they cut seat capacity and flights by about 7 per cent and prepare for the worst downturn since 2001.
The US domestic market accounts for about a third of that fall but the Official Airline Guide (OAG), which collates data on airline schedules, has also warned that seat capacity in Asia could fall 13 per cent -- equivalent to a three-year setback in growth.
Other grim statistics show 275 airports worldwide will lose air services, 32 of them in the US and 116 in the Asia Pacific, while airlines are tipped to take 3500 fewer planes than originally planned by 2017.
Transatlantic routes, which are benefiting from a big switch in capacity as US carriers seek to escape turmoil in their domestic routes, are bucking the trend with 2 per cent year on year growth.
The news comes as several airlines, including the huge Air France-KLM Group, are reporting big falls in profit.
Air France-KLM said yesterday that first-quarter net profit fell by 59 per cent thanks to high fuel costs and a slowing economy.
Similar factors were blamed for forcing Spain's Iberia into the red and British Airways last week warned that its first-quarter profits had been "nearly wiped out" by the cost of keeping its planes flying.
OAG chief operating officer Steve Casley said it took the industry a good three years to recover from a 5 per cent fall in capacity and 7 per cent fall in flights during the 2001 downturn.
Mr Casley warned that after steady annual growth since 2002 there would be an unprecedented global decline in the fourth quarter. He said a 13 per cent fall in Asia, confirmation of which was still subject to northern winter schedule filings by several Chinese carriers, would be "a significant metric that may have a wider impact".
"From OAG's statistics, it looks quite possible that we may be facing a far more severe global downturn than we have experienced before," he said. "The industry's resilience will be pushed to its limits in the coming months, with carriers, airports and passengers alike all waiting and watching for a glimmer of light at the end of the tunnel."
Mr Casley said commercial aviation marched in lock step with the global economy, reflecting growth and declines in GDP, and had been growing 3 to 4 per cent a year on average.
That growth had been interrupted by the dot.com meltdown, 9/11, the Gulf War and the SARS epidemic within Asia.
Copyright 2008 News Ltd.
The Australian
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