Airlines relish rebound after two lean years

Paris: Commercial airlines in the United States, Europe and Asia are at last relishing a rebound in their financial fortunes, announcing profit spurts after two very lean years. The civil aviation sector in recent months has enjoyed a pronounced pick-up in both passenger and freight demand, with airlines welcoming the return of high-end travellers with deep pockets.
US carriers United, Continental, American Airlines and Delta Airlines earlier this month reported solid net earnings, followed this past week by upbeat announcements from airlines in Europe and Asia.
"Airlines are experiencing a growth in traffic volumes and -- most importantly -- a price context that is extremely favourable," said analyst Pierre Boucheny of Kepler Capital.
In the face of a brutal plunge in demand during the finance crisis, airlines undertook drastic capacity cuts and cost reduction initiatives.
Now, as demand firms, carriers have some margin to raise prices.
FBE Aerospace analyst Saj Ahmad nonetheless sounded a cautionary note.
"A recovery does indeed seem under way -- however we are a very long way off from previous profit margins and even further away from sustained profitability.
"With so many mergers in the pipeline, all the hard work could be undone as airlines work for synergies and amalgamation of their businesses -- so it's not over yet.
31/10/10 Agence France-Presse/Hindustan Times

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Categories: Foreign Oct 2010, Indian Aviation- In General Oct 2010