Despite slashed airfares, world airlines are set to lose $4.7 billion in 2009, taking revenue lower than after the Sept. 11 terrorist attacks in 2001. The International Air Transport Association blames the dire economic conditions around the globe for the weakness, and the demand has lowered faster than originally anticipated, reports Frank Jordans for Associated Press.
Revenues are expected to fall by $62 billion, or 12%, to $467 billion, the association said. Actions to conserve cash are going to impact the delivery of Boeings’ (BA) Airbus planes and take double the losses throughout the industry.
The Asia-Pacific region has been hit the hardest and those carriers are actually dodging the pain of misjudged oil hedging contracts that left other carriers exposed when prices fell last year. No doubt this small crisis within the transportation sector will re-shape and re-size the industry, explains Caroline Brothers for The New York Times.
- Claymore/NYSE Arca Airline (FAA): down 3.4% for one month; up 2.7% in one week
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