Home / Airline industry lost $13 billion worldwide in 2002

Airline industry lost $13 billion worldwide in 2002

The world airline industry’s bottom line received a major blow in the last two years sustaining some US$13 billion in losses for 2002 alone and $18 billion in 2001 according to the president and CEO of IATA.

The world airline industry’s bottom line received a major blow in the last two years sustaining some US$13 billion in losses for 2002 alone and $18 billion in 2001 according to a top industry official, reported the Associated Press (AP).

The losses in the last two years were more than the combined profits of the last 45 years, Giovanni Bisignani, director and CEO of the International Air Transport Association told an audience attending a conference in Trinidad and Tobago.

“This industry has lost more than the profits of the past, this gives you an idea of the dimension of the problem: it means the industry is really in great, great problems,” Bisignani said.

Bisignani said the airlines suffered most as a result of the Sept. 11 terrorist attacks, which put a dent in worldwide travel patterns. Weak revenues, he said, would continue as airlines struggle with new add on insurance and security costs that have increased from an average $1 billion a year to $5 billion.

In 2002, the number of passengers declined 2.5% from the yearly average of 1.6 billion of the last few years and freight carried by international airlines increased 6 percent over 2001, according to Bisignani. He went on to say that the number of passengers would only increase by 4% by 2006, not enough to offset higher operation costs, reported AP.

But airlines are struggling with high operating costs, including security measures, Bisignani said. He predicted that the number of passengers would increase 4 percent by 2006, but not enough to offset higher operation costs.

United Airlines and US Airways were two high profile cases of companies forced to file for bankruptcy in 2002.

One third of all business travellers have used a “no frills/low cost” airline in the past 12 months mainly for the cost benefit, and a total of 37% use video conferencing to save travel time and money, according to The International Air Transport Association (IATA).

Business travellers are showing increasing interest in in-flight business facilities with connecting passenger information and email/internet access all rated as important in-flight features, says the IATA in latest survey on corporate travel, which also cites that more than 3 out of 5 of all business travellers would be willing to pay a one-off supplement for email/internet access.



Follow us to get the most comprehensive technology news in UAE delivered fresh from our social media accounts on Facebook, Twitter, Youtube, and listen to our Weekly Podcast. Click here to sign up for our weekly newsletter on curated technology news in the Middle East and Worldwide.

REGISTER NOW | Webinar Event | Security you can bank on – Safeguarding the Middle East’s financial sector

Presented in partnership with security and network specialist Cybereason, the second in the three part webinar series will bring together a panel of experts to discuss how banks and financial institutions are evolving their service offering while simultaneously staying one step ahead of the cyber criminals who seek to bring their operations crashing to the ground.

CHANNEL AWARD 2018