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International Air Transport Association fears for the future

The International Air Transport Association has today confirmed that the worldwide airline industry lost a staggering $6 billion in the first six months of 2009 which leaves the association's original forecast of a $9 billion loss for the year in tatters. A mixture of reduced business levels and increased costs has squeezed many airlines from both sides and cash flow is now a major problem in many areas of the industry.

Today's announcement of the collapse of SkyEurope is a further nail in the coffin of the worldwide budget airline industry although there are also problems in the mainstream airline sector. Even if, as expected, the worldwide economy picks up in the latter part of 2009 and 2010 this may come too late for many well-known airline companies which have been slashing costs over the last few months. It will be interesting to see how the sector as a whole performs in the second half of 2009 because obviously the collapse of SkyEurope will have dented consumer confidence and could yet again impact upon business levels.

The airline sector has been one of the major growth sectors of the last decade and ultimately seems to experience significant highs and significant lows due to major swings in business levels. This is an industry where only the toughest will survive!

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