The airline industry is facing a 'year of hell' that could be worse than the downturn after the attacks of 9/11, the head of the European Regional Airlines (ERA) has warned. Mike Ambrose, the director general of the ERA, which represents 79 airlines, said at the groups' annual conference that he expected the number of carriers around the world declaring bankruptcy to double to at least 70 this year.
Almost three dozen airlines have already been grounded because of a combination of high fuel costs and falling passenger demand. XL, the travel company, was declared bankrupt last month stranding 80,000 passengers and others, such as Zoom, Silverjet and Oasis have also been forced to close. Mr ambrose said: 'We are now up to around 35 this year. I see at least that number over the winter.'
The worsening economic environment combined with a normal reduction in passenger numbers over winter is expected to lead to even greater losses in the aviation sector. Mr Ambrose said that the current climate for airlines was 'far more significant, far more far-reaching' than the period after the attacks on New York in 2001, describing the current year as a 'year of hell'.
He said: 'At 9/11 there was a terrorist attack that created a loss of confidence in safety. This is far more pernicious - it is a loss of confidence in investment. There are a major set of problems - such as governments shoring up banks - that go way outside aviation and take longer to resolve.'
Mr Ambrose called for a lower regulatory burden for airlines, estimating that a European scheme to make airlines pay more for carbon emissions could add 6 million a year to the cost of a typical regional airline. |
