Airlines expect record loss

Press, 24 December 1980, Page 6

Airlines expect record loss

NZPA-Reuter'. ,* Geneva The world’s international airlines expect a record $2.« bllUon loss this year, leading airtransport official has said. Knut Hammarskjoeld, director-general of the International Air Transport Association, said in an end-of-vear review that 1981 promises to be little better for I.A.T.A.’s 108 member airlines, carriers of 70 per cent of the world’s scheduled air traffiC*Tntemational scheduled operations will probably , not show a profit and the recently announced O.P.E.C. (oil) price in-

i creases add a new element of uncertainty to the airlines’ future,” he said in a report published yesterday. The airline revenues were expected to total $34.84 billion, a 19” per cent increase on last 'year’s figure. But operating costs and interest payments were forecast to be $37.4 billion, 27 per cent up on 1979. He said that economic recession in industrial nations, inflation, rising fuel prices, and governments* “haphazard regu- . latory approaches to aviation*! were the main factors combining to drive airlines into the red.

International passenger traffic stagnated during 1980. Freight and mail turned the stagnation into an over-all increase of 2 per cent but it was the worst result since 1975, Mr Hammarskjoeld said. About two-thirds of airlines’ costs now fell outside their control, he reported. “This applies not only to the price of fuel but also to a whole range of other expenses — particularly airport landing and . . . navigation charges — set by governments with political as well as economic ends in mind.” He said the losses left the airlines short of eash

to replace equipment and aircraft. “The airlines continue to face an uphill task . . . the very survival of some of them may be put at risk, particularly as regards privately owned carriers with no government backing. “Barring unexpected developments, the average price of fuel for the year 1981 should be about $1.47 per United States gallon (3.78 L up from $1.28 this year,” the I.A.TJV direct-or-general said. Scheduled international passenger traffic was forecast to grow about 5 per cent and freight traffic 6 per cent.