Tough Year for European Carriers

THE ASSOCIATION of European Airlines (AEA) has predicted that 2012 will be a difficult year for most carriers.  The statement follows a recent, similar forecast from the International Air Transport Association (IATA) which cited rising fuel costs, financial turmoil across the continent and the EU’s Emission Trading Scheme (ETS) as key factors.
“Most of our members have posted good results over the first nine months of 2011.  Passenger numbers are up 8% and the outlook for the full year is positive,” AEA Secretary General Ulrich Schulte-Strathaus commented.  “However, freight figures have been faltering since mid-year and third-quarter yields are beginning to weaken.  The fourth quarter will mark the start of a tough ride ahead.
“There is one certainty for 2012: it will not be an easy ride for European airlines.  The prospect of high external costs and depressed demand is not a good combination.  Reflecting the uncertain political climate, our membership is expected to post a €1-2 billion loss for 2012.
“This forecast is heavily dependent on a swift and effective political solution to the sovereign debt crisis.  There is little our regulators can do to cut the cost of fuel, but national governments can cut airline fuel burn by delivering on their Single European Sky promises.  They can recognise the fact that aviation taxation damages the economy.  Finally, they can cut uncertainty by resolving conflict around the emissions trading debate.  A globally acceptable solution to ETS is a must for 2012.”