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AEA forecasts EUR1.3bn losses for its member airlines in a 'tough' 2012

14-Dec-2012 3:20 PM

Association of European Airlines (AEA) stated (13-Dec-2012) 2012 has been a “particularly tough year for European airlines” and expects its member airlines to report an EBIT loss of EUR1.3 billion, which is still slightly better than its previous forecasted loss of EUR1.5 billion. Accumulated losses since the 2008/09 economic crisis are forecast to reach EUR4.1 billion. The industry association attributed the forecast result to a “combination of a weak European economy and sky-high fuel prices together with the effects of an on-going euro crisis”. AEA members are expected to report a 2.9% growth in passenger numbers to 10.5 million and achieve an all-time high average passenger load factor of 79%, up 1.5 ppt, due to moderate and regionally targeted capacity expansion. Freight traffic, however, is expected to decline by 4% compared to 2011, and down by 8% when compared to 2008 levels. Looking ahead, traffic growth for AEA members is expected to be mild in 2013. Unit revenue will continue to be under intense pressure from lower demand and fierce competition, according to AEA. To cope with these challenging conditions, European airlines have taken various measures to streamline operations and to reduce the cost base. To date, 17,000 job losses have been announced this year, in addition to the 20,000 job cuts made during the early days of the 2008/09 crisis. However, despite these efforts, the AEA believes consistently high jet fuel costs and a wide range of air traffic related charges will continue to erode airlines’ profitability. [more – original PR]