=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/c/a/2008/09/04/BUMI12NJUB= .DTL --------------------------------------------------------------------- Thursday, September 4, 2008 (SF Chronicle) Airlines will lose money in 2008, led by U.S. George Raine, Chronicle Staff Writer The global airline industry is expected to lose $5.2 billion in 2008, nearly all from beleaguered U.S. carriers, and while the forecast for 2009 is for more of the same, there are places where profit is being made, a trade association said Wednesday. The International Air Transport Association said $5 billion of the losses will be declared by North American carriers. That compares with a $2.8 billion profit for 2007, according to figures from the association, which represents 230 airlines and 93 percent of scheduled international air traffic. "The situation remains bleak," Giovanni Bisignani, the Geneva-based association's chief executive, said in Montreal on Wednesday. "The toxic combination of high oil prices and falling demand continues to poison the industry's profitability." The association includes 12 major U.S. airlines also represented by a U.= S. trade association, the Air Transport Association of America. That group has not made a 2009 forecast but estimated, when crude oil was $140 a barrel and climbing, that 2008 losses would be from $7 billion to $10 billion. Oil, which reached as high as $147 a barrel this year, closed at $109 a barrel Wednesday on the New York Mercantile Exchange. A steep decline in oil prices represents falling demand, which is not welcome news as it reflects weakening economies, said Bisignani. Nevertheless, Asia/Pacific airlines are expected to see profits in 2008. They will shrink, however, from $900 million in 2007 to $300 million this year, said the association. European profits will tumble sevenfold from $2.1 billion in 2007 to $300 million in 2008. Middle Eastern profits will drop by $100 million to $200 million. Latin American and African carriers will see losses deepen to $300 milli= on and $700 million, respectively, according to the association. The association said the "difficult business environment is expected to continue" into 2009. The group is projecting industry losses of $4.1 billion for next year, calculating oil at $110 a barrel ($136 for a barrel of jet fuel). As the association's revised industry forecast was being released Wednesday, Jet Airways of India said that on Oct. 31 it will begin daily through flights to Bangalore, India's third most populous city, from New York, Newark and Toronto. In fact, within the past 10 months, Jet Airways has launched daily, dire= ct flights from San Francisco, New York, Newark, N.J., and Toronto to 60 destinations across Asia, including Mumbai, New Delhi and Chennai, India, and nonstop service to Brussels and Shanghai. Jet Airways called the expansion perhaps the most aggressive in aviation history, even given industry turmoil. "Our vision is to make reaching destinations in India as effortless as possible," Naresh Goyal, the founder and chairman of Jet Airways, said in a statement. "The industry may be losing money, but not all airlines will lose money and some will make money," said Henry Harteveldt, an airline industry analyst at Forrester Research. "It depends on your fuel hedging position (meaning to contract for purchase of fuel at a fixed price for future delivery), and whether markets are strong economically - a strong mix of business and leisure traffic. India is growing. "Generally, airlines that have less fuel-efficient fleets and serve matu= re markets, such as Europe and North America, where older fleets are operated, face the biggest challenge in making money" in the airline industry. Southwest Airlines is the only major U.S. carrier to significantly hedge jet fuel. This year, Southwest has 70 percent of its fuel hedged at about $51 per barrel. It's the only profitable U.S. carrier. Europeans have a natural hedge because they buy fuel in euros, not weak dollars, noted Steve Lotts, spokesman for the International Air Transport Association. Last week, American Airlines asked the Department of Transportation for permission to postpone for a year nonstop service it planned between Chicago and Beijing. American said it can't afford to fly the route given "the extraordinary adverse market and operating conditions affecting the entire airline industry." U.S. airlines' on-time performance in July improves over last year. C2 Numbers by region U.S., Latin American and African carriers are all projected to be in the red this year, while airlines in Europe, Asia/Pacific and the Middle East will remain profitable - though less so than last year. Region2008*2007*United States-$5,200$2,800Asia/Pacific300900Europe3002,100Middle East200300Latin America-300-10Africa-700-400 *in millions Source: International Air Transport Association E-mail George Raine at graine@xxxxxxxxxxxxxxxx ----------------------------= ------------------------------------------ Copyright 2008 SF Chronicle <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> If you wish to unsubscribe from the AIRLINE List, please send an E-mail to: "listserv@xxxxxxxxxxxxxxxxx". Within the body of the text, only write the following:"SIGNOFF AIRLINE".