IATA: Shielding flag carriers 'is killing airlines'

[Matt Molnar]

Shielding flag carriers 'is killing airlines'

· Iata urges governments to stop protectionism
· More mergers seen as only solution to excess capacity

This article appeared in the Guardian on Monday March 17 2008 on p29 of the Financial section. It was last updated at 00:05 on March 17 2008.

Governments shielding their national flag carriers are "killing" the aviation industry, the head of the International Air Transport Association (Iata) has warned.

Giovanni Bisignani, chief executive of Iata, warned that protectionist attitudes towards flag carriers were exacerbating the downturn. Soaring oil prices and slowing economies are causing concern for airlines, which raised capacity by buying aircraft but now struggle to fill them.

"Governments around the world ... say they cannot lose their flag carrier. I am always telling them that the flag on the tail is killing our industry, " he said. The Iata boss warned there would be "pain" this year. Profit forecasts for the industry for 2008 have been slashed from $7.8bn (£3.9bn) to $5bn. He said financial difficulties were forcing one airline a month out of Iata, which now has 240 carriers. [Full article]

I highly recommend you read this, this guy is a piece of work. He claims protectionism is killing airlines, but fails to recognize in many cases protectionism is the only thing keeping an airline alive. When you have no one to blame but yourself, blame the government(s).

[T-Bird76]

Consolidation is impossible because countries such as the US ban majority ownership of airlines by foreign firms. British Airways has been barred from taking over Spain's flag carrier, Iberia, and had to join a Spanish-led consortium.

What the hell does this have to do with the U.S Gov't? The U.S Gov't has nothing to say about affairs in Spanish commerce.

This is one of the worst articles I've read....it really makes no sense at all. It also lists America West as an airline that declared Chap 11, which they didn't

[Matt Molnar]

I think they were using the US rules and Spanish rules as separate examples, not implying they were related.