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Aviation History
2003
2003 - 2303.PDF
"Staff will try to claw back some of the lost benefits when earnings start to rise again" MARTIN BORGHETTO, MORGAN STANLEY Traffic and yields are coming back." Half a year later, the outlook had changed. Faced with stagnant economies in the USA and Europe, the International Monetary Fund was stating by the end of the year that "the pace of recovery has slowed...industrial production has stagnated", and it duly revised its growth predictions for 2003. Recovery Many airlines went into this year believing that 2003 would be worse than 2002 and some first half results have borne that out. However, in the second half of this year there have been encouraging signs of the US stock market and economy recovering and that the bottom of the trough has at least been reached. Despite this, the worry for manufacturers is that capacity will be filled by returning furloughed aircraft to service rather than acquiring new ones. There is another more fundamental con cern. Without far-reaching reform, both to the way US airlines in particular are run, and transatlantic flying rights, the major airlines could struggle to return to profit even once passenger numbers return. Not only will airlines be tempted to push for market share at the expense of yields - as British Airways and Lufthansa have both done, according to Chris Avery - but economies and efficiencies brought in dur ing difficult times will be eroded as employees demand better pay and condi tions. Martin Borghetto, airline analyst at Morgan Stanley, argues that streamlined working practices will break down and "staff try to claw back some of the lost ben efits when earnings start to rise again". It could be that the world's major airlines will find paying back that $9 billion deficit harder than they might imagine. • TOP 50 AIRLINES BY PASSENGERS, 2002 1 Rank Airline 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Delta Air Lines American Airlines United Airlines Southwest Airlines Northwest Airlines US Airways All Nippon Airways Lufthansa Continental Airlines Air France British Airways Japan Airlines Qantas Airways Iberia KLM Air Canada Alitalia Korean Air Scandinavian Airlines (SAS) China Southern Japan Air System America West Passenger millions 107.0 94.1 68.5 63.0 52.7 47.2 44.7 43.9 40.0 39.0 38.0 33.6 27.1 23.9 23.4 23.1 22.2 22.2 21.9 21.5 21.3 19.5 Thai Airways International 18.3 Malaysia Airlines Ryanair Singapore Airlines Saudi Arabian Airlines Alaska Airlines TAM Asiana Airlines Cathay Pacific Airways China Eastern Airlines American Eagle 16.3 15.7 15.3 14.8 14.2 13.8 12.4 12.3 12.0 11.9 Swiss International Air Lines 11.6 EasyJet Air China THY Turkish Airlines ATA Varig AirTran Airways ExpressJet Austrian A/I Group Aeromexico Comair Emirates SkyWest Airlines Atlantic Southeast Air New Zealand China Airlines Britannia Airways 11.4 10.6 10.4 10.0 9.7 9.7 9.2 8.8 8.8 8.7 8.5 8.4 8.3 8.3 8.1 8.0 AIRLINER BUSINESS To see how you can download these rankings visit our Premium data service at: WAWiWllllllttl? www.flightinternational.com FLIGHT INTERNATIONAL 14-20 OCTOBER 2003 45
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