Travel Agent - October 13, 2008 - (Page 58)

TR ANSPORTATION Airline Groups Offer Sober Outlook Economic concerns join high fuel prices in a one-two punch BY GEORGE DOOLEY THE OUTLOOK FOR THE REST OF 2008 SEEMS BLEAK FOR THE AIRLINES AND TRAVEL INDUSTRY, and 2009 doesn’t seem much better. While many agents hope that leisure travel sales will remain strong, the airlines face tough challenges— including high fuel costs. Adding to the concern of agents are promised airline capacity cuts and weaknesses in the economy. Compounding the problems is the multibillion-dollar federal bailout of Wall Street now underway, which falls in the midst of a tough national election cycle. The airlines will lose $5.2 billion in 2008, in part due to slowing demand and high oil costs, according to revised estimates by the International Air Transport Association (IATA). “The situation remains bleak. The toxic combination of high oil prices and falling demand continues to poison the industry’s profitability,” says Giovanni Bisignani, IATA’s director general and CEO. While some regions will show small profits, IATA says, the negative impact of the industry crisis is universal. North American carriers are expected to post losses of $5 billion in 2008, making them the hardest hit by the industry crisis. IATA, offering a global perspective, also believes that industry traffic data shows a continued slowing of demand. July year-on-year passenger demand growth fell to 1.9 percent. Capacity increased by double that, 3.8 percent, indicating that service cuts are not keeping pace with the fall in demand. IATA also noted a surprise drop in July of 0.5 percent in passenger demand by AsiaPacific carriers. While partly attributable to a change in Chinese visa requirements, IATA said it showed that “economic weakness is spreading to previously robust economies.” For U.S. airlines, projections for the remainder of the year— and 2009 as well—continue to be bleak Looking forward to 2009, IATA said it expected the “difficult business environment” to continue. “Most economies are expected to deliver even weaker economic growth next year, which will negatively impact air travel and freight.” The 2009 fuel bill is expected to rise, as hedging offers less protection, to $223 billion—comprising 40 percent of operating expenses. In its 2009 Business Travel Market Insights, American Express offers a different perspective. Key air trends cited in the report include energy cost volatility, airline consolidation, higher airline costs, ticketing restrictions, airline fee proliferation and capacity cuts. Tighter controls over corporate spending are also noted. Business Travel Woes Weighing in with another perspective is the Association of Corporate Travel Executives (ACTE), which surveyed 131 members on how their corporations will fund business travel in 2009; two of the response categories clearly indicate “less spending” and “less frequent travel.” “Thirty-six percent said they’d be spending more on business travel next year, while 33 percent indicated they’d be spending less and 31 percent said they’d be spending the same,” ACTE reported. ACTE said the number-one cause of the cutbacks in travel spending, according to 47 percent of the survey’s respondents, is a combi- CONNECTING YOU For more on changes to the airline industry, visit www. travelagentcentral.com/air-travel nation of economic uncertainty and rising fuel costs. ACTE said 31 percent are cutting back on travel straight across the board while 39 percent are cutting back on internal meetings and 16 percent are reducing international travel. For the Air Transport Association (ATA), the outlook is not much better. The ATA told Congress that more than 14,000 airline jobs have been cut so far this year and that by cutting capacity, scores of communities stand to lose all commercial air service by early 2009. The airline industry is “burning through cash at unprecedented rates” and barely “surviving from month to month” the ATA says. Airlines are on the “brink of financial disaster and, some would say, about to implode,” the ATA warned Congress. “If Congress does not turn things around very soon, the impact on the country’s economy will be even worse.” Analysts, the ATA said, are predicting that a 20 percent reduction in capacity may not be enough to save the industry. “Based on the communities that stand to lose service, airline hubs will be decimated, tens of thousands more jobs will be eliminated and tourist destinations will be devastated by huge cuts in the number of flights.” Few envision a quick fix for the airlines’ problems even if a consensus can be reached on what the fix might be. Visit www.acte.org, www.iata.org or www. airlines.org I 58 | TravelAgent October 13, 2008 http://www.travelagentcentral.com/air-travel http://www.acte.org http://www.iata.org http://www.airlines.org http://www.travelagentcentral.com/air-travel http://www.airlines.org

Table of Contents Feed for the Digital Edition of Travel Agent - October 13, 2008

Travel Agent - October 13, 2008 Online Now Contents From the Editor Central & South America Bermuda Europe Pacific/Asia Las Vegas Florida Middle East Cruises Celebrity Continues to Grow and Adapt to the Changing Travel Climate Oasis on the Horizon Troubled Skies Agent Profile Agenda Princess Summit Unveils New Tools for Selling Cruises Tanzania Aims to Draw More U.S. Travelers Jamaica May Legalize Gambling, and New Resorts are in the Works ASTA Seeks Expanded Support from the Agent Community In the Spotlight Agent Access Classified Marketplace Editorial Index Advertising Index Trendwatch

Travel Agent - October 13, 2008

Travel Agent - October 13, 2008 - Travel Agent - October 13, 2008 (Page Cover1) Travel Agent - October 13, 2008 - Travel Agent - October 13, 2008 (Page Cover2) Travel Agent - October 13, 2008 - Travel Agent - October 13, 2008 (Page 1) Travel Agent - October 13, 2008 - Online Now (Page 2) Travel Agent - October 13, 2008 - Online Now (Page 3) Travel Agent - October 13, 2008 - Contents (Page 4) Travel Agent - October 13, 2008 - Contents (Page 5) Travel Agent - October 13, 2008 - Contents (Page 6) Travel Agent - October 13, 2008 - Contents (Page 7) Travel Agent - October 13, 2008 - From the Editor (Page 8) Travel Agent - October 13, 2008 - From the Editor (Page 9) Travel Agent - October 13, 2008 - From the Editor (Page 10) Travel Agent - October 13, 2008 - From the Editor (Page 11) Travel Agent - October 13, 2008 - From the Editor (Page 12) Travel Agent - October 13, 2008 - From the Editor (Page 13) Travel Agent - October 13, 2008 - Central & South America (Page 14) Travel Agent - October 13, 2008 - Central & South America (Page 15) Travel Agent - October 13, 2008 - Central & South America (Page 16) Travel Agent - October 13, 2008 - Central & South America (Page 17) Travel Agent - October 13, 2008 - Central & South America (Page 18) Travel Agent - October 13, 2008 - Central & South America (Page 19) Travel Agent - October 13, 2008 - Bermuda (Page 20) Travel Agent - October 13, 2008 - Bermuda (Page 21) Travel Agent - October 13, 2008 - Bermuda (Page 22) Travel Agent - October 13, 2008 - Bermuda (Page 23) Travel Agent - October 13, 2008 - Bermuda (Page 24) Travel Agent - October 13, 2008 - Bermuda (Page 25) Travel Agent - October 13, 2008 - Bermuda (Page 26) Travel Agent - October 13, 2008 - Bermuda (Page 27) Travel Agent - October 13, 2008 - Bermuda (Page 28) Travel Agent - October 13, 2008 - Bermuda (Page 29) Travel Agent - October 13, 2008 - Europe (Page 30) Travel Agent - October 13, 2008 - Europe (Page 31) Travel Agent - October 13, 2008 - Europe (Page 32) Travel Agent - October 13, 2008 - Europe (Page 33) Travel Agent - October 13, 2008 - Europe (Page 34) Travel Agent - October 13, 2008 - Europe (Page 35) Travel Agent - October 13, 2008 - Pacific/Asia (Page 36) Travel Agent - October 13, 2008 - Pacific/Asia (Page 37) Travel Agent - October 13, 2008 - Las Vegas (Page 38) Travel Agent - October 13, 2008 - Las Vegas (Page 39) Travel Agent - October 13, 2008 - Florida (Page 40) Travel Agent - October 13, 2008 - Florida (Page 41) Travel Agent - October 13, 2008 - Middle East (Page 42) Travel Agent - October 13, 2008 - Middle East (Page 43) Travel Agent - October 13, 2008 - Cruises (Page 44) Travel Agent - October 13, 2008 - Cruises (Page 45) Travel Agent - October 13, 2008 - Cruises (Page 46) Travel Agent - October 13, 2008 - Cruises (Page 47) Travel Agent - October 13, 2008 - Celebrity Continues to Grow and Adapt to the Changing Travel Climate (Page 48) Travel Agent - October 13, 2008 - Celebrity Continues to Grow and Adapt to the Changing Travel Climate (Page 49) Travel Agent - October 13, 2008 - Celebrity Continues to Grow and Adapt to the Changing Travel Climate (Page 50) Travel Agent - October 13, 2008 - Celebrity Continues to Grow and Adapt to the Changing Travel Climate (Page 51) Travel Agent - October 13, 2008 - Oasis on the Horizon (Page 52) Travel Agent - October 13, 2008 - Oasis on the Horizon (Page 53) Travel Agent - October 13, 2008 - Oasis on the Horizon (Page 54) Travel Agent - October 13, 2008 - Oasis on the Horizon (Page 55) Travel Agent - October 13, 2008 - Oasis on the Horizon (Page 56) Travel Agent - October 13, 2008 - Oasis on the Horizon (Page 57) Travel Agent - October 13, 2008 - Troubled Skies (Page 58) Travel Agent - October 13, 2008 - Troubled Skies (Page 59) Travel Agent - October 13, 2008 - Agent Profile (Page 60) Travel Agent - October 13, 2008 - Agent Profile (Page 61) Travel Agent - October 13, 2008 - Agent Profile (Page 62) Travel Agent - October 13, 2008 - Agent Profile (Page 63) Travel Agent - October 13, 2008 - Agent Profile (Page 64) Travel Agent - October 13, 2008 - Agent Profile (Page 65) Travel Agent - October 13, 2008 - Agent Profile (Page 66) Travel Agent - October 13, 2008 - Agent Profile (Page 67) Travel Agent - October 13, 2008 - Agent Profile (Page 68) Travel Agent - October 13, 2008 - Agenda (Page 69) Travel Agent - October 13, 2008 - Princess Summit Unveils New Tools for Selling Cruises (Page 70) Travel Agent - October 13, 2008 - Princess Summit Unveils New Tools for Selling Cruises (Page 71) Travel Agent - October 13, 2008 - Tanzania Aims to Draw More U.S. Travelers (Page 72) Travel Agent - October 13, 2008 - Tanzania Aims to Draw More U.S. Travelers (Page 73) Travel Agent - October 13, 2008 - Jamaica May Legalize Gambling, and New Resorts are in the Works (Page 74) Travel Agent - October 13, 2008 - Jamaica May Legalize Gambling, and New Resorts are in the Works (Page 75) Travel Agent - October 13, 2008 - ASTA Seeks Expanded Support from the Agent Community (Page 76) Travel Agent - October 13, 2008 - ASTA Seeks Expanded Support from the Agent Community (Page 77) Travel Agent - October 13, 2008 - In the Spotlight (Page 78) Travel Agent - October 13, 2008 - In the Spotlight (Page 79) Travel Agent - October 13, 2008 - Agent Access (Page 80) Travel Agent - October 13, 2008 - Agent Access (Page 81) Travel Agent - October 13, 2008 - Agent Access (Page 82) Travel Agent - October 13, 2008 - Agent Access (Page 83) Travel Agent - October 13, 2008 - Agent Access (Page 84) Travel Agent - October 13, 2008 - Classified Marketplace (Page 85) Travel Agent - October 13, 2008 - Editorial Index (Page 86) Travel Agent - October 13, 2008 - Advertising Index (Page 87) Travel Agent - October 13, 2008 - Trendwatch (Page 88) Travel Agent - October 13, 2008 - Trendwatch (Page Cover3) Travel Agent - October 13, 2008 - Trendwatch (Page Cover4) 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