High fuel prices meant the airline crisis

Governments have been warned to stop treating air transport like a cash cow, amid projections showing global airline losses will grow 25per cent this year to $US6billion ($7.9billion).

&to=http:// english.pravda.ru/economics/2001/11/27/22102.html ' target=_blank>International Air Transport Association director-general Giovanni Bisignani warned yesterday that high fuel prices meant the industry's crisis had continued and governments that had lost their way were not delivering the change demanded by industry, travellers and the &to=http:// english.pravda.ru/world/20/91/365/12233_sanctions.html ' target=_blank>global economy.

IATA estimates airlines' global fuel bill this year will be $US83billion, equivalent to the gross national product of New Zealand and $US39billion more than in 2003.

The global airline body has increased its loss prediction by $US500million since April, when its estimate for the 2005 global fuel bill was $US7billion lower at $US76billion. Losses in 2004 totalled $US4.8billion, informs the Australian.

According to the Financial Times, the fuel bill, which now accounts for around 22 percent of the industry's total costs has jumped by $39 billion in two years, and has overwhelmed airlines' efforts to cut costs.

Non-fuel costs had been reduced by 2-3 percent a year and were forecast to fall by 4.5 percent this year, said Mr. Bisignani, while passenger traffic was forecast to rise by 5.4 percent.

Global airline cumulative net losses are forecast to reach $42 billion in the five years 2001-05, but the bulk of the losses have come in the U.S. U.S. carriers had net losses of $9.1 billion last year compared with net profits of $2.6 billion earned by Asia Pacific airlines and profits of $1.4 billion made by European carriers.

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