Airline profits pick up worldwide

The association, which represents 265 airlines with 94 per cent of international traffic, also cut its forecast of the global industry's losses in 2006 by half to US$2.2 billion. US carriers in particular are expected to lose just US$5.4 billion in 2006, half the losses they posted in 2005.

While high fuel prices have been hampering growth in the aviation market in recent years, an increase in passenger traffic due to improved economic conditions in many countries, as well as a general trend towards improving the efficiency of airline services, has had a positive effect on profits.

But Giovanni Bisignani, Chief Executive of Iata, warned against complacency. "There are some wild cards beyond our control – avian flu and security among them," he said. "If we are looking for a common villain, it is fuel."

The association also announced that a recent survey of airline chief financial officers found that more than two-thirds predicted an increase in profitability over the next year. The global market has been buoyed considerably in recent months by a return to more positive fortunes by many of the major US airlines, due to cost cutting measures.

A different study by the Airports Council International reported that passenger traffic through the world's airports increased by six per cent in 2005, compared with 2004. The top five busiest airports for international travellers were listed as London Heathrow, Paris Charles de Gaulle, Frankfurt, Amsterdam and Hong Kong, while the number of travellers taking international flights increased to 1.6 billion.

Links between Europe and the Middle East were expanded earlier this year with the introduction of two new direct services from Dublin and London to Dubai. The new routes were introduced by Aer Lingus and Virgin Atlantic and are the first Middle Eastern destinations to be offered by either company from London or Dublin.

Virgin Atlantic's service between London Heathrow and Dubai was introduced on a four-times-weekly schedule but is expected to increase to a daily service from June. Richard Branson, Chairperson of the airline, said, "Dubai is the second largest long-haul route out of London and we are confident we can make big inroads into this market, targeting 10 per cent in our first year of operation."

The Aer Lingus flight from Dublin to Dubai is the carrier's first long-haul destination outside of the USA and marks a significant development for the airline. The service is expected to carry in excess of 70,000 passengers in its first year of operation. Noel Dempsey, Ireland's Minister for Communications, Marine and Natural Resources, said, "Not only will our passengers be able to fly directly to Dubai but our partnership with Emirates will also allow Irish passengers the option to travel on to a further 21 destinations in the southern hemisphere, making long distance travel easier and more accessible for everyone."

Canada could soon be welcoming an influx of Chinese tourists after it is made an approved tourist destination later this year.

The Canadian Tourism Commission predicted that Chinese tourist arrivals would increase by 25 per cent annually following the ruling. Currently, China only allows its citizens to visit Canada for business, study or family visits, of which an estimated 100,000 occur per year. It is hoped that the number of Chinese arrivals could rise to 500,000 once approved status is given.

A Chinese-language tourism website has been launched to promote Ontario as a potential destination for Chinese tourists, ahead of the ruling. Ontario Tourism Minister, Jim Bradley, said, "This new website provides valuable information about Ontario's tourism destinations and will help increase awareness of Ontario's attractions for Chinese travellers."

Low-cost airline Easyjet has announced negotiations to establish its operational base for southern Europe at Madrid's Barajas Airport. A spokesperson for the carrier said that Madrid offers good growth opportunities because of the opening last month of a new passenger terminal.

Austrian Airlines is to add to its already extensive network of Eastern European routes, adding flights from Vienna to Yekaterinburg in Russia; Donetsk in the Ukraine; Iasi and Sibiu in Romania; Pecs in Hungary; and Ostrava in the Czech Republic this summer. The carrier's Eastern European route network will then service a total of 44 cities in 23 countries.

A new reciprocal codeshare deal between Air China and Virgin Atlantic Airways will see Virgin Atlantic customers able to purchase flights between London Heathrow and Beijing from July, complimenting existing daily flights to Shanghai. Virgin Atlantic's Commercial Director, Willy Boulter, said, "We look forward to welcoming more passengers on board this year and further expansion in China in the future."

A Queensland ministerial mission is being sent to Japan and South Korea in a bid to encourage more tourists from these countries to visit the state. Queensland Tourism has blamed falling visitor numbers on a cutback in flights between Japan and Queensland and hopes that meetings with Japanese and Korean airlines will help reverse this decline.

US carrier, United Airlines, restored its daily non-stop passenger service between San Francisco and Seoul Incheon International Airport in April this year. The carrier is currently the only airline in the USA to offer this service. Meanwhile, American Airlines launched a long-awaited daily non-stop service from Chicago O'Hare International Airport to Shanghai Pu Dong International Airport in China in March.

German airline, Lufthansa, announced that profits for 2005 were up by 51 per cent to e577 million (US$712 million) on the previous year, despite a 46 per cent increase in fuel costs. "Despite sky high fuel prices and a relatively weak economy, we carried more passengers and freight and improved capacity utilisation," said Chief Executive, Wolfgang Mayrhuber. Germany's air traffic is also set to increase in the future, after the Germany government approved plans for a new airport in Berlin, due to open in 2011. The new airport, which will be called Berlin Brandenburg International, will be capable of handling 22 million passengers annually.

Chile's LAN Airlines expects to break even in 2007 after predicting an increase in 2006 revenue of 20 per cent to US$3 billion. Chief Executive, Enrique Cueto, said that six aircraft would be added to the fleet this year and the airline would also begin flying from Buenos Aires to Miami.