Reports from the International Transport Association show that more airlines are expected to go under this year. This goes double for airlines in Europe. In fact, this announcement comes in as reports show that European airlines have collectively lost more than £642 million this year. This is a lot of money for any one industry to lose. These losses are mostly due to the fact that there is not enough demand for all of these airlines. It could also have to do with the fact that many airlines are in pricing wars right now and continue to drop their rates.
The International Air Transport Association went on to predict that losses would be doubling by next March. They have also predicted that an intensified Euro Zone crisis and a return to high fuel costs would be the final nail in the coffin for many carriers.
This news comes fresh off =reports that Flybe has posted an annual loss of close to £7.1 million. Apparently, the loss was mostly due to the struggling British domestic marketplace. Currently, the demand is very low for air travel there. Most people are finding it cheaper to travel by car.
The chief economist for the International Air Transport Association, Brian Pearce, said there is a serious risk to the financial viability of some airlines in Europe. People are seeing some European airlines going out of business this year, and there remains a serious possibility that more will follow. There just does not seem to be any relief in sight for some of these airlines. It has proven to be very difficult to turn a profit right now.