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Last Updated: Monday, 2 January 2006, 23:19 GMT
Setbacks and success for world airlines
By Jon Cronin
BBC News business reporter

It has been another troubled year for much of the global airline industry.

Passenger jet takes off as an Airbus A380 taxies nearby
The global airline industry hopes to pull out of losses in 2007

The soaring cost of oil and cut-throat competition has left many of the biggest names in the sky reeling.

According to the International Air Transport Association (IATA), the industry is going through "the worst crisis in our history".

"We are already seeing slower growth for passenger traffic," IATA boss Giovanni Bisignani has warned.

The airline body anticipates that, overall, the industry will have plummeted into the red by $6bn (3.4bn) in 2005 - marking a fifth consecutive year of losses.

But despite the bleak outlook, a number of airlines have continued to perform strongly, while the IATA itself predicts the sector could return to profit in 2007.

BBC News takes a snapshot of the industry during 2005, charting the ups and downs of some of the world's leading carriers.

Bullish budget airlines

Europe's top no-frills airlines continued to climb high, and none more so than Ryanair.

Easyjet plane at John Lennon Airport
Easyjet managed to overcome soaring fuel prices

The Dublin-based carrier reported an 18% jump in half-year profits in November, but Ryanair's normally outspoken boss Michael O'Leary sounded a note of caution about his firm's prospects in the second half of its financial year.

Fuel costs will remain high "for some time", he warned.

Nevertheless, Ryanair continued its relentless European expansion, announcing plans to pump $1bn into Frankfurt Hahn airport, making the German hub its second-biggest after London Stansted.

Ryanair also said it was planning to allow passengers to gamble during flights, a move - the airline said - that could eventually see it do away with the need to charge fares.

Model service

Rival budget flyer Easyjet reported a 9% rise in profits in November, despite revealing that its fuel costs had soared by almost 50%.

New routes and a round of cost cutting offset the high price of fuel, outgoing chief executive Ray Webster said.

Outside Europe, India's emerging no-frills market continued to shine.

Spicejet took to the skies in May, charging 99 rupees ($2.30) for many seats during its first three months in a bid to woo train passengers away from their beloved carriages.

Rival carrier Kingfisher was another start-up. The low-cost airline, owned by the beer baron Vijay Mallya, boasts that it employs models as flight attendants.

Troubled US skies

Bankruptcy protection hung over many of the most prominent US airlines.

Plane taking off
Is the sun setting on some of America's biggest airlines?

In September, Delta Air Lines and Northwest announced within minutes of each other that they were filing for Chapter 11 bankruptcy protection.

They joined fellow troubled carriers United and US Airways.

Atlanta-based Delta said protection from its creditors would enable it to become "a simpler..and more cost-effective airline".

The third-biggest US carrier has lost $10bn since 2001, and is saddled with $14bn of debt.

The US airline industry has largely failed to recover from the downturn following the September 11 terror attacks, while higher fuel prices have added to the desperate situation faced by many airlines.

Losses in the US airline sector for 2005 are set to widen to $10bn from $9.1bn in the previous year, according to the IATA.

On the upside, troubled carrier US Airways and smaller rival America West Airlines merged.

The combined airline, which retains the US Airways brand but is dominated by America West, plans to take on budget rivals Southwest Airlines and JetBlue.

Analysts said the move made sense. But Ray Neidl, of Calyon Securities, added: "The big question is can they make it work?"

Flag carriers take stock

Efforts to turn around troubled Alitalia continued in earnest.

Airbus A380 with Emirates livery
Emirates is thinking big

The Italian government said it would help prop-up the ailing carrier in November by buying almost half of the shares on offer in a 1bn euro new stock issue.

Rivals flag carriers cried foul, claiming it was nothing more than an unfair state subsidy, but European regulators disagreed.

Alitalia, which made a loss of 800m euros in 2004, has expressed hopes that it might eventually be able to join forces with Europe's biggest carrier, Air France-KLM.

Meanwhile, British Airways had yet another mixed year.

The airline saw its flights from London's Heathrow airport grounded for two days in August after ground staff walked out in sympathy with sacked workers at Gate Gourmet, the company which supplies BA with its onboard food.

New boss

BA said that the Gate Gourmet dispute - which also left its flights without meals - cost it up to 45m, and reported an 18% fall in profits to 241m for the three months to 30 September.

The airline's new chief executive, no-nonsense Irishman Willie Walsh, described the second-quarter figures as "reasonable results in the circumstances".

Diners on Germany's Lufthansa had no such trouble. Europe's second-biggest carrier raised its profit forecast for the full year twice, and snapped up smaller rival Swiss.

But one of the brightest lights hailed from outside Europe.

Dubai-based carrier Emirates aims to become the biggest long-haul carrier in the world by the end of the decade.

With an order for 45 giant Airbus A380 planes in the pipeline, and figures suggesting it has the lowest costs per passenger mile of any airline in the industry, analysts believe Emirates could have what it takes to climb to the top of the pack.


SEE ALSO:
US airlines seek foreign capital
03 Nov 05 |  Business
US airlines make bankruptcy move
14 Sep 05 |  Business


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