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Transportation

Global Airline Industry Loses Lift

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By Douglas A. McIntyre Published

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The global airline industry is no where close to recovery according to the head of its largest trade association. “Oil prices are high, although moderating somewhat from recent peaks. The European sovereign debt crisis is unresolved and we are seeing signs that it is starting to affect Asia’s export-driven economies. And the largely jobless recovery from the 2008 global financial crisis is proceeding at a glacial pace. Passenger demand is strong, cargo is weak and the industry’s profitability remains razor thin,” said Tony Tyler, IATA’s Director General and CEO. The IATA is expected to revise downward its 2012 industry outlook for a $3.0 billion profit on $633 billion in revenues for a net margin of 0.5%.

The news means that carrier consolidations are not over. More and more airlines will seek saving in mergers meant to cut duplicate costs. Northwest and Delta (NYSE: DAL) and United (NYSE: UAL) and Continental have already done this in the US. US Airways (NYSE: LCC) has expressed interest in buying the American Airlines assets from its bankrupt parent AMR. That does not leave any room for more mergers in the US. Too much market share rests with too few carriers.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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