(Source: Daily Mail Online, Economic Times & Business Week)

Image Courtesy: Wall Street Journal

The crumbling economy has left many industries in dire straits and probably the hardest hit was dealt on the aviation industry.  Amidst rising oil prices and the chaotic economic climate, the airlines around the world are battling to stay alive.  The story has become gone from bad to worse for two national carriers – Britain and India, the colonial cousins. While India’s national carrier- Air India has decided to delay the monthly salary for its employees by 15 days, the British Airways has gone tothe extreme of asking its staff to work for free for a month.   The paragraphs below offer a glimpse of the airlines’ struggle.

Pathetic State of British Airways

British Airways boss Willie Walsh is asking his 40,000 staff to work for nothing to save the airline.

The astonishing plea comes as BA faces what Mr Walsh says is a ‘fight for survival’.

The company has written directly to its 40,000 employees asking them to volunteer for up to four weeks of unpaid work.

Mr Walsh announced last week that he would work unpaid for the month of July – forgoing £61,000 in salary. His chief financial officer Keith Williams is also working unpaid for the month.

The appeal to staff goes much further than earlier requests for a pay freeze or unpaid leave.

But it infuriated cabin crew. One said: ‘BA now stands for “B***** all” because that’s what they want to now pay us. That’s the calibre of management we have at British Airways.’

Passengers face the threat of a summer of strikes as the airline goes into battle with unions this week for a deal to slash costs and sweep away what it sees as

restrictive practices. BA is understood to be seeking up to 4,000 job cuts – one in ten of the workforce – including 2,000 voluntary redundancies among the 14,000 cabin crew.

BA adds that the action ‘will help minimise the financial impact on individuals, while helping to immediately save cash for the business’.

It denied that those who volunteer-for unpaid work will be given preference when any subsequent redundancies are considered.

The company is also asking staff to consider temporary or permanent part-time work, short-term unpaid leave of up to four weeks, or long-term unpaid leave of between one and 12 months.

Mr Walsh has set a deadline of June 24 for employees to volunteer for unpaid work of one to four weeks. He has also set a deadline of June 30 for a deal with unions, who say he will impose terms if he cannot get prior agreement.

Leaders of all the main BA unions are meeting management this week for talks on permanent cuts on pay, conditions and the loss of up to 4,000 jobs.

The biggest conflict is with 14,000 cabin crew who are gearing up for a major showdown with Mr Walsh which – if it leads to industrial action and strikes – will mean chaos for tens of thousands of holidaymakers.

The Daily Mail has learned that BA ground staff have already rejected the company’s proposals by six to one. Insiders say 2,987 voted No while only 487 backed the measures. One said: ‘Even the groundstaff are squaring up to Willie for a strike.’

BA has frozen pay and axed more than 2,500 jobs since last summer – including 780 management posts. It has revealed a record annual loss of £ 401million, which it blamed on rising oil prices adding almost £1billion to last year’s fuel bill, and a major fall in passenger numbers.

Pathetic State of Air India

The National Aviation Company of India (Nacil), the company that operates Air India, has decided to defer the payment of June salary to its 31,000 employees by 15 days due to severe liquidity crunch.

Air India top officials—general manager levels and department heads—have got an email, stating that the salary will be delayed by 15 days. The e-mail will be forwarded by department heads to their colleagues this week, said a senior official.

Last week, Air India, had tabled a blueprint to the aviation ministry on how it will utilise the Rs 14,000-crore bailout package, if it’s granted.

Another senior AI official said that Rs 14,000 crore package is necessary for the national carrier to run operations smoothly.

In May, the country’s second-largest private carrier Jet Airways had sacked around 50 employees and referred them to an in-house out placement cell, which will help them find jobs with other airlines.

On the other hand, the fully government-owned company Nacil, covering the combined operations of Air India and Indian Airlines, has nearly doubled its losses to Rs 4,000 crore in FY09.

Industry trackers say AI has not been in the best of health and the government bailout is critical. The cost of acquiring 144 aircraft has shot up from Rs 45,000 crore to Rs 50,000 crore on account of currency fluctuations.

As Air India’s decision was made public, employees of the carrier have threatened to go on an indefinite strike from July 1 if the management delays their salaries next month, a workers’  union leader said Tuesday. “We have decided to go on an indefinite strike from July 1 if the Air India management refuses to pay our salaries on time. We are chalking out strategies for our further course of action,” J.B. Kadian, general secretary of the Air Corporation Employees‘ Union (ACEU), told IANS.

The decision was taken in a meeting of ACEU, the largest union among the Air India employees, here Tuesday. The union has already submitted a memorandum to NACIL chairman and managing director Arvind Jadhav, requesting him to roll back the management decision to delay the salaries.

International Air Transport Association revised its airline financial forecast for 2009 to a global loss of $9 billion, nearly double the March estimate of a $4.7-billion loss.

(Source: Business Standard & Green Car Congress)

Image: REUTERS/Zainal Abd Halim via Boston Globe

The international airline industry is committed to achieving carbon-neutral growth by 2020, said Giovanni Bisignani, IATA’s Director General and CEO in his State of the Industry address at the 65th IATA Annual General Meeting and World Air Transport Summit in Kuala Lumpur.

Two years ago we set a vision to achieve carbon-neutral growth on the way to a carbon-free future. Today we have taken a major step forward by committing to a global cap on our emissions in 2020. After this date, aviation’s emissions will not grow even as demand increases. Airlines are the first global industry to make such a bold commitment.

—Giovanni Bisignani

The commitment to carbon-neutral growth completes a set of three sequential goals for air transport: (1) a 1.5% average annual improvement in fuel efficiency from 2009 to 2020; (2) carbon-neutral growth from 2020 and (3) a 50% absolute reduction in carbon emissions by 2050.

To achieve these goals, the air transport industry is focusing on a cross-industry four-pillar strategy on climate change consisting of improved technology; effective operations; efficient infrastructure; and positive economic measures.

In 2009 the carbon footprint of air transport is expected to shrink by 7%. Of this, 5% is due to the recession and 2% is directly related to efficiency gains.

Bisignani said a cross industry four-pillar strategy on climate change focused on improved technology, effective operations, efficient infrastructure and positive economic measures was delivering results noting that in 2009 the carbon footprint of air transport was expected to shrink by 7 per cent.

Bisignani attributed 5 per cent to the recession and 2 per cent to efficiency gains from IATA’s four-pillar strategy.

“No other industry is as united and no other industry can point to such good results and progress,” Bisignani claimed.  He noted that the airlines’ commitment needed to be matched by governments. “We are ambitious, but our success will be contingent on governments acting effectively.”

“International Civil Aviation Organisation (ICAO) must set binding carbon emissions standards on manufacturers for new aircraft. A legal and fiscal framework to support the availability of sustainable biofuels must be established.

“Governments must work with air navigation service providers to push forward major infrastructure projects such as a Single European Sky, NextGen in the US or fixing the Pearl River Delta in China,” Bisignani added.

(Source:  Time)

The International Air Transport Association (IATA), which represents 230 airlines worldwide, increased its loss estimate from the $4.7 billion it forecast in March, reflecting a “rapidly deteriorating revenue environment.”

Although there has been growing signs of a bottoming out of the recession, IATA said the industry was severely hit in the first quarter with 50 major airlines reporting losses of more than $3 billion. Weak consumer confidence, high business inventories and rising oil prices pose headwinds for future recovery, the association said during a two-day global aviation conference in Kuala Lumpur.

Revenues are expected to decline by $80 billion — an unprecedented 15% from a year ago — to $448 billion this year, and the weakness will persist into 2010, it said.

“There is no modern precedent for today’s economic meltdown. The ground has shifted. Our industry has been shaken. This is the most difficult situation that the industry has faced,” said IATA Chief Executive Giovanni Bisignani. The Geneva-based association also revised its estimated loss for last year to $10.4 billion from $8.5 billion previously.

It said passenger traffic for 2009 is expected to contract by 8% from a year ago to 2.06 billion travelers. Cargo demand will decline by 17% and some 100,000 jobs worldwide are at risk, it said.

The association expects the industry fuel bill to shrink by $59 billion, or 36%, to $106 billion this year, accounting for 23% of operating costs with an average oil price of $56 a barrel. But crude oil prices have rallied in recent weeks, breaching the $70 a barrel level on Friday on hopes of economic recovery.

IATA said carriers in all regions were expected to report losses, with Asia-Pacific to be the hardest hit amid a sharp slowdown in its three key markets — Japan, China and India. The region’s carriers are expected to post losses of $3.3 billion, worse than the previous forecast of $1.7 billion but better than the $3.9 billion losses last year.

North American carriers are expected to lose $1 billion, far better than its $5.1 billion losses in 2008, thanks to early capacity cuts and limited hedging by U.S. airlines.

(Source: Bloomberg & Livemint.com)

Global airline passenger traffic fell 10 percent last month, the steepest decline since the recession began, led by a plunge in long-haul travel.

The decline, gathering pace from a 5.6 percent fall in year-on-year traffic in January, included a 12.8 percent reduction in passengers flown by Asia-Pacific carriers and a 12 percent drop among North American airlines, the International Air Transport Association said today in a statement.

While passenger numbers continued to deteriorate, the pace of declines in the freight market leveled out. International freight volumes were down 22.1 percent from a year ago, compared with drops of 23.2 percent drop in January and 22.6 percent in December, IATA said.

:  “Freight traffic, which began its decline in June 2008 before passenger markets were hit, has now had three consecutive months in the minus 22 to minus 23% range,” IATA added, says the Livemint.com (WSJ) article.

Giovanni Bisignani, IATA’s director general, said: “We may have found a bottom to the freight decline, but the magnitude of the drop means that it will take time to recover.”  But even as freight traffic stabilises, airlines are now feeling the squeeze in passenger traffic.

(Obtained via Reuters)

GENEVA, Feb 19 (Reuters) – More than 500 people died in air crashes on Western-built jets in 2008 and safety lapses at airlines contributed to nearly a third of accidents, the International Air Transport Association (IATA) said.

The toll of 502 was down from 2007, when 692 died, but the number of crashes rose slightly.

The 2008 industry-wide accident rate, measured in hull losses per million flights, was 0.81, or one accident every 1.2 million flights. This compared with 0.75 in 2007.

“Runway excursions”, when an aircraft left the runway on take-off or landing, accounted for one-quarter of accidents last year and ground damage was reported in another 17 percent, according to IATA on Thursday.