The head of the IATA (International Air Transport Association), a trade body representing 230 airlines comprising 93% of scheduled international air traffic, predicts that the global airline industry could lose more than $6.1 billion in total this year. High oil prices, needless to say, were blamed. But a looming global recession is adding insult to injury.
“We are bracing for more situations of airlines collapsing” amid higher fuel prices and lower revenue, warned IATA Chief Executive and Managing Director Giovanni Bisignani, speaking at a National Aviation Press Club lunch. “We are a fragile industry in a crisis,” he said.
While Bisignani expects much-needed consolidation to occur among airlines, he also chided governments around the world for their regulatory hurdles:
“The crisis will have a positive impact on governments as they have to understand we need freedom to run the business,” he said.
However, even if governments all across the globe step out of the way and let airlines consolidate and “run their businesses,” the current industry structure still can’t withstand $115 oil, nevermind $150. Unless oil somehow collapses, flying may either become a luxury good…or governments will have to get more involved, not less.
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