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Airlines lost $12bn in '01, more than what they ever earned

Rumi Dutta

Airlines across the globe (IATA members) incurred net loss of $12 billion in 2001 on their international scheduled services.

P J Jeanniot, director general & chief executive officer of IATA, said the association's member airlines have lost more in 2001 than what they have made in their entire history.

The impact was more on European and American airlines. With India accounting for less than 1 per cent of the global aviation industry, the direct impact on the airlines here has been negligible. But, the industry felt some indirect reverberations.

A senior executive with an international airline operating in India said, "Though there was no direct impact on India operations, it has made us more cautious. At present, we are striving to get out of the current financial abyss. We are revisiting all the avenues of growth and expelling the existing inefficiencies."

International airlines operating here are reviewing their existing size and corporate overheads and are rationalising operations. While India has emerged as a potential market for some international airlines, many have dropped India from their list of destinations offered.

According to Jeanniot, the external factors are not the sole reason for the poor results. Even before September11, the industry was ill prepared to weather even a mild downturn in the economic cycle.

Analysts tracking the industry feel that globally, though the downturn would continue to prevail during early 2002, it is expected to stabilise in late 2002, followed by a recovery in 2003.

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