ATA says profitability not in sight until late 2003

Washington DC
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US majors believe that only a best-case scenario will yield a profitable quarter by the last half of 2003.

According to Air Transport Association (ATA) president Carol Hallett, losses are likely to continue in 2002 and “at best, the airline industry hopes to see a profitable quarter in the latter part of 2003”. The ATA, which lobbies on behalf of US majors, has released a “state of the airline industry” report that offers little hope to US airlines looking for a quick turnaround.

The report explains that the 11 September terrorist attacks caused industry finances, which were already the worst they had been in years, to spiral to losses that would have exceeded a collective $10 billion for 2001 were it not for the US government’s $5 billion bailout of airlines. Hallett says the “challenge ahead” is to “sustain this vital industry through a period of catastrophic losses and return it to a point of economic stability”.

The ATA concludes that returning passengers do not signal a return to profitability: “Passenger volume should slowly improve, but it will take significantly longer to return economic viability and vitality to the US airline industry.”

The ATA report says airlines need to be prepared to quickly take advantage of an economic recovery when it occurs. It exhorts all segments of the aviation industry to work together and warns that the government “must do its part by meeting its new security requirements … in a manner that invites travelers back into the air while resisting the urge to raise fees, charges and taxes”.

Today in New York, a working group of travel organizations known as the Flight Plan for America Committee launched a campaign to convince Americans to return to air travel. Fronted by Apollo 13 astronaut James Lovell, the group is encouraging people to fly and advises them to make preparations in advance to lessen the hassles of the heightened airline security. “A cell phone, bottled water, a snack, a book and a good sense of humor – these are the tools of smart travel today,” says Lovell.

The group is made up of representatives from Airlines Reporting Corporation (ARC), the American Association of Travel Agents (ASTA), Association of Retail Travel Agents (ASTA), Delta Air Lines and Southwest Airlines.