Operating losses continue to hit airlines

Two major airline groups have just reported significant losses in half-year trading:

Performance at International Airlines Group was badly hit by Iberia where the Spanish carrier contributed an operating loss of 263 million euros, while BA the other part of IAG, made a 13 million euros profit.

This led IAG to revise forecasts and predict an operating loss from the year instead of breaking even.

IAG stated that it was to reveal the outcome of a restructure and job cuts at Iberia by the end of September and that focus would be on ‘stringent’ cost control across the group.

Meanwhile the Lufthansa Group reported an operating loss of 20 million euros in the first half of the year and plans for future capacity cuts.

The figure did however reflect a big improvement against the same period last year despite its fuel bill soaring by 22% to 3.6 billion euros.

The John Proctor Travel view

These recent interim results from two major airline groups reflect just how deeply the recession is affecting the aviation industry. Despite efforts to control operating costs, soaring fuel charges and difficult trading conditions have continued to make for gloomy results.

In the corporate world business travellers are using every opportunity to reduce costs by every means possible and many companies have reviewed their travel policy, resulting in ‘back end’ travel for many of their employees travelling on short to medium length flights. Meanwhile the leisure market continues to struggle as consumers make every attempt to maximise their available budgets.

We feel that difficult times are here for some time yet- in the meantime during these trying economic times, you can be sure that we will do everything we can to ensure that our clients receive the very best deals from all of out transportation partners.

← Back to all Travel News