Europe's carriers made a consolidated profit of around $2 billion in 1998, the Association of European Airlines (AEA) has estimated, although it says that around half that sum "was a windfall from historically low fuel prices". The AEA's 27 members saw a 7.5% increase in passenger kilometres, but seat kilometre offered rose by 8.1%, leading to a 0.4% point drop in average load factor to 71.5%.

While many carriers managed to avoid over-capacity and were able to maintain or improve 1997's load factors, there were several big-name casualties of "empty-cabin syndrome", including British Airways and KLM, previously regarded as two of Europe's most efficient airlines.

Both blamed the Asian crisis and knock-on transatlantic over-capacity, although the Dutch flag carrier was also hurt by a strike at US partner Northwest Airlines.

BA's tumbling profits have caused it to completely rethink its entire strategy and focus squarely on the business market, while KLM has also sought to drastically reign in capacity - a move which produced a 1.6% point improvement in its May load factor, year on year.

Of Europe's other traditionally "dynamic" airlines, Swissair fared modestly well, but Lufthansa was the big winner - recording growth in terms of profit, sales, traffic and load factor. Bucking the trend, the airline is increasing capacity further this year.

Elsewhere, SAS struggled but Air France was buoyed by a successful privatisation, despite mixed financials. Alitalia's net profit dropped, but mainly because exceptional gains lifted 1997's figure, while Iberia and Austrian were able to boast a big improvement. Sabena perhaps had most to celebrate, recording its first net profit in 40 years.

Source: Flight International