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European airlines still in the red

By control on December 13, 2012

Members of the Association of European Airlines (AEA) will lose €1.3 billion ($1.7 billion) this year, with an EBIT margin of -1.3 percent.

The outturn is slightly better than the €1.5 billion ($1.96 billion) loss the association had previously forecast, but member airlines remain under the cosh from a heavy regulatory burden–prompting complaints about the lack of a level playing field–high fuel costs, and the weak European economy.

As IATA also reported this week, the passenger and freight sectors have had differing experiences in 2012. AEA members will transport an additional 10.5 million passengers, 2.9 percent more than 2011. “With moderate and regionally targeted capacity expansion, passenger load factors will achieve an all-time high of 79 percent,” the association said, although it added that the yield trend was less positive.

Freight traffic will end the year 4 percent down from 2011, and 8 percent below 2008 levels.
“We see our members making tremendous efforts to cut internal costs and increase revenue. But despite these measures, consistently high external costs will continue to erode our airlines’ profitability,” said Athar Husain Khan, AEA acting secretary general.

The association called for prompt implementation of measures to liberalize ground handling and the Single European Sky initiative to help its members reap the benefit of any recovery in 2013. Khan also urged that a global solution be found as soon as possible on emissions trading.

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