Aviation Industry in Jeopardy!

Airlines suffer as demand falls

Lufthansa recorded a profit in 2008 despite falling demand for flights
A number of major global airlines have reported losses or big falls in profits for 2008 as the global economic downturn hits demand for air travel.
Cathay Pacific recorded a net loss of $1.1bn (£802m) for the full year, blaming falling demand for flights and high fuel prices at the start of 2008.
Aer Lingus posted a net loss of $136m, compared with a $133m profit in 2007.
Finally, Lufthansa's net profits slumped two-thirds to $758m, compared with $2.1bn for the previous year.




'Deeply disappointing'
The loss at Hong Kong carrier Cathay Pacific was far worse than expected and compares with a profit of $900m in 2007.
The airline suffered big losses from betting on futures contracts which were designed to hedge against surging fuel prices seen during the first half of 2008.
"The outcome is deeply disappointing," said Cathay chairman Christopher Pratt.


"Having made a painful adjustment to high fuel prices, the aviation industry now has to adjust to a severe economic downturn.


"Cathay Pacific expects an extremely challenging year in 2009," he added.
Aer Lingus blamed a "weak and rapidly deteriorating operating environment" for its losses, and said it was unlikely to meet its profits forecasts for this year.


"Falling consumer demand in key markets, a weakening dollar and sterling, and increased competition put pressure on our business throughout the year," said chief executive Dermot Mannion.


He also said that record highs in fuel prices had hurt the airline.
The boss of German airline Lufthansa, Wolfgang Mayrhubber, said the company's profit represented "an outstanding result", but warned that 2009 would present "a far more challenging environment





Many airlines across the world suffered big losses from betting on futures contracts which were designed to hedge against surging fuel prices seen during the first half of 2008. Case on point, Air Asia. Well, put in another words, doing business is just like betting. Win or Lose. It seems like during current economic downturn, most business are on losing streak!!!