[Anonymous]

[PaulosAshebir]

The problem is “the economy”- not fuel prices. That’s what people are thinking now. But what does that mean exactly?

Initially Airlines blamed their expected losses for 2008 on rising prices in this fuel-driven economy. Well what about the decline in oil prices from $147-a-barrel this summer to $40-a-barrel now? The Industry expects a $4 billion loss at the close of 2008.

In 2009, 8 of the largest airlines are expected to lose over $5.3 billion (not including non-cash write-downs). Revenue in 2008 was also not enough to cover the real costs of airline operations even with all the new ala carte fees.

Looking at the International Air Transport Association’s passenger traffic report, Airlines now claim that the decline in demand for seats is probably caused by the recession. As Doug Parker(chief of US Airways Group Inc.) put it: “While fuel prices have fallen, the economy has created a new uncertainty for us, and the industry’s going to lose billions of dollars this year.”

So what does 2009 look like for the industry? I have a poll out for that on Airline Stars http://www.airlinestars.com/node/586

[Charles-P]

Their will be a fall in demand for business class seats as less and less travel is taken in 2009, holiday seats will also fall. Perhaps now we will see a reduction in the costs from some airlines as they try to entice us back ?

[canoepunkie]

I wonder what effect modern teleconferencing solutions (e.g. Cisco Telepresence) will have?

[Author]

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