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IATA Predicts Big Industry Losses  
User currently offlineLightsaber From United States of America, joined Jan 2005, 13552 posts, RR: 100
Posted (5 years 9 months 1 week 2 days 17 hours ago) and read 2713 times:
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http://finance.yahoo.com/news/Airlin...oup-predicts-big-apf-14725883.html

From the IATA report (there is more worth reading in the link):
IATA, which represents 230 airlines worldwide, said passenger traffic is expected to drop by 5.7 percent over the year. Cargo demand will decline by 13 percent.

"Both are significantly worse than the December forecast of a 3.0 percent drop in passenger demand and a 5.0 percent fall in cargo demand," it said.

Bisignani said losses would have been even larger without the fall in fuel prices in recent months.

IATA also revised upward to $8.5 billion its forecast losses for last year. The previous estimate was $5 billion.



Ouch...

Lightsaber


Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
12 replies: All unread, jump to last
 
User currently offlineAF022 From France, joined Dec 2003, 2175 posts, RR: 1
Reply 1, posted (5 years 9 months 1 week 2 days 16 hours ago) and read 2698 times:

Wow. Really? How insightful. Everyone knows the economy is in turmoil all over the world and IATA comes out with this?

Their work is really pathetic. Useless. Why do they even exist anymore?


User currently offlineUnited1 From United States of America, joined Oct 2003, 6137 posts, RR: 9
Reply 2, posted (5 years 9 months 1 week 2 days 16 hours ago) and read 2681 times:

I guess its worth breaking it down where they expect the lossses to cocur....

North America $100 Million Dollar Profit

Europe $1 Billion Loss
Asia Pacific $1.7Billion Loss
Africa $600 Million Loss
Rest of the World $1.4 Billion Loss

All in all a 4.7 billion dollar loss....



Semper Fi - PowerPoint makes us stupid.
User currently offlineLightsaber From United States of America, joined Jan 2005, 13552 posts, RR: 100
Reply 3, posted (5 years 9 months 1 week 2 days 15 hours ago) and read 2602 times:
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Quoting United1 (Reply 2):
North America $100 Million Dollar Profit

There is the insight and the surprise.

Now the cut in production from 1,100 to 700 aircraft is staggering. That implies the IATA members have let them know that major changes are on the way in terms of aircraft procurement.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineLipeGIG From Brazil, joined May 2005, 11459 posts, RR: 58
Reply 4, posted (5 years 9 months 1 week 2 days 15 hours ago) and read 2588 times:
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Quoting Lightsaber (Reply 3):
Quoting United1 (Reply 2):
North America $100 Million Dollar Profit

There is the insight and the surprise.

Now the cut in production from 1,100 to 700 aircraft is staggering. That implies the IATA members have let them know that major changes are on the way in terms of aircraft procurement.

Lightsaber

North America is probably the first area to begin capacity cuts while others like Asia continue to add capacity. In fact it's not a surprise.



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User currently offlineLightsaber From United States of America, joined Jan 2005, 13552 posts, RR: 100
Reply 5, posted (5 years 9 months 1 week 2 days 15 hours ago) and read 2585 times:
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Quoting LipeGIG (Reply 4):
North America is probably the first area to begin capacity cuts while others like Asia continue to add capacity. In fact it's not a surprise.

Actually, the magnitudes are a surprise.

Its a shame the Middle East and India were not broken out. That region's performance will be an interesting 2009/2010 topic.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineLipeGIG From Brazil, joined May 2005, 11459 posts, RR: 58
Reply 6, posted (5 years 9 months 1 week 2 days 14 hours ago) and read 2511 times:
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Quoting Lightsaber (Reply 5):
Actually, the magnitudes are a surprise.

Its a shame the Middle East and India were not broken out. That region's performance will be an interesting 2009/2010 topic.

May be because they are not facing a major drop right now, but would be smart not to add much more additional capacity and by the time they notice a drop, could be even worst and dangerous.



New York + Rio de Janeiro = One of the best combinations !
User currently offlineViscount724 From Switzerland, joined Oct 2006, 26029 posts, RR: 22
Reply 7, posted (5 years 9 months 1 week 2 days 6 hours ago) and read 2380 times:



Quoting AF022 (Reply 1):
Their work is really pathetic. Useless. Why do they even exist anymore?

IATA has saved airlines billions of dollars in many areas, for example by coordinating shorter air routes in many parts of the world, by leading the industry move to almost 100% e-ticketing over the past couple of years, by running the clearing house that permits airlines to settle their monthly interline billings in a single payment rather than dealing separately with hundreds of other airlines and suppliers, by coordinating the colection and payment of air navigation fees for many ATC service providers, to mention only a few services that benefit their members. IATA lobbying has also resulted in several major airports reducing landing fees and other user charges.

The IATA Operational Safety Audit that airlines must successfully complete to retain IATA membership has also helped improve air safety.

If IATA services were not considered valuable by their members, why haven't airlines been cancelling their participation to save their annual membership costs? Virtually all major world airlines are still IATA members. Almost all industries support a trade association similar to IATA. If IATA ceased to exist, airlines would have to re-create many of their current services in some other way, likely at much higher costs. Just the administration of all the codes used in the airline industry (airport/city/airline codes) would be very difficult to organize if IATA didn't exist to handle such things.


User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 47
Reply 8, posted (5 years 9 months 1 week 2 days 6 hours ago) and read 2361 times:



Quoting Lightsaber (Reply 3):
Quoting United1 (Reply 2):
North America $100 Million Dollar Profit

There is the insight and the surprise.

Are they talking about accounting profits?

If NA carriers end up with $100 million accounting profits, then my back of envelope calculations yield about $5 billion in positive operational cash flows.


User currently offlineLightsaber From United States of America, joined Jan 2005, 13552 posts, RR: 100
Reply 9, posted (5 years 9 months 1 week 1 day 18 hours ago) and read 2279 times:
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Quoting Viscount724 (Reply 7):
by running the clearing house that permits airlines to settle their monthly interline billings in a single payment rather than dealing separately with hundreds of other airlines and suppliers,

Probably their most valuable function is to work as the international clearinghouse. Prior to the alliances, this was the only way to enable interline travel. However, much of this work is now handled by the alliances. However, its still a very valuable function.

Quoting LAXDESI (Reply 8):
Are they talking about accounting profits?

I do not know the details.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineTango-Bravo From United States of America, joined Jun 2001, 3806 posts, RR: 29
Reply 10, posted (5 years 9 months 1 week 1 day 13 hours ago) and read 2234 times:



Quoting AF022 (Reply 1):
IATA comes out with this?

Their work is really pathetic. Useless. Why do they even exist anymore?

Why? I have often asked the same question myself and have come to the conclusion that IATA continues to exist for no other reason than they have somehow succeeded at the game of making their organization a self-perpetuating bureaucracy, albeit an irrelevent one. Since they are underwritten by the airlines, they no doubt feel compelled to tell the airlines what they want to hear ...if indeed IATA is capable of making reasonably accurate projections.


User currently offlineViscount724 From Switzerland, joined Oct 2006, 26029 posts, RR: 22
Reply 11, posted (5 years 9 months 1 week 1 day 7 hours ago) and read 2181 times:



Quoting Tango-Bravo (Reply 10):
I have often asked the same question myself and have come to the conclusion that IATA continues to exist for no other reason than they have somehow succeeded at the game of making their organization a self-perpetuating bureaucracy, albeit an irrelevent one. Since they are underwritten by the airlines, they no doubt feel compelled to tell the airlines what they want to hear

IATA generates a large proportion of its revenues from the sale of products and services. For example, cargo carriers (and not just IATA members) and shippers rely heavily on IATA's Dangerous Goods Regulations. IATA also generates a lot of revenue from consulting and training services. IATA's management philosophy, and most of their staff, has totally changed over the past few years. It used to be much more bureaucratic.


User currently offlineUnited1 From United States of America, joined Oct 2003, 6137 posts, RR: 9
Reply 12, posted (5 years 9 months 1 week 1 day 2 hours ago) and read 2140 times:



Quoting LAXDESI (Reply 8):
Are they talking about accounting profits?

They don't specify however I'm going to make a guess that they are referring to net profit as based on analyst estimates the US legacies alone will greatly exceed 100M in operational profit. However all the legacies, once special charges and non-operating costs are factored in, will probably show a net loss.

Quoting LAXDESI (Reply 8):
If NA carriers end up with $100 million accounting profits, then my back of envelope calculations yield about $5 billion in positive operational cash flows.

At the current cost of fuel and with all the capacity cuts the airlines are expected to generate quite a bit of cash this year.



Semper Fi - PowerPoint makes us stupid.
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