European airlines are teetering on the brink of financial collapse, with combined losses expected to exceed $1billion this year, the International Air Transport Association warned today.
Speaking at the Association's annual general meeting in Beijing, director general Tony Tyler said the problems facing European airlines had deepend over the past three months.
Losses for the full year are now expected to reach at least $1.1bn, $500m more than predicted in March.
If the banking crisis in Spain spreads to other countries, the losses could be even higher, said Tyler.
He said the recessions in Britain and Spain, combined with jitters over the eurozone, threatened "a major downward shift in economic prospects".
And IATA's chief economist Brian Pearce warned that if the recession sweeps across Europe, more airlines may go bust. "I think there is a serious risk to the financial viability of some airlines," he said. "We have already seen some airlines go out of business and there is a clear possibility it will continue."
Tyler told IATA's annual general meeting in Beijing that the crisis in Europe was now a bigger concern among airlines than rising oil prices.
He said that high passenger taxes, including Air Passenger Duty in the UK, and "poorly thought-out" European regulations were hitting airlines. Several carriers were critical of Europe's carbon emissions trading scheme, which was extended to airlines in January.
By Linsey McNeill
Monday, June 11, 2012