Airlines in Financial Crisis: American airlines have almost all posted losses in 2008, in fact, only one major airline, Southwest Airlines, actually reported making a profit in 2008. Though this may be seen as simply being a sign of America’s hardship, this reflects upon the world economy as a whole. The fact that all the major airlines are in this disparaging condition is a sign of the struggling world economy. World trade is down, this is a result of plummeting gas prices which is hurting the world as well.
The problem is that sky rocketing gas prices (though low now, they will return) have pushed up the price of travel. Airlines append so much on gas that the price must be then placed upon the consumer. Because of the price of gas, airlines over the world are struggling. The IATA [International Air Transport Association] reported worldwide losses of $5 Billion in 2008.
It is my own belief that if this condition is to continue, a different form of international transportation will have to be found. In the event that all the airlines in the world should go bankrupt and disappear, the world shall have either already found an alternative form of transportation faster than travel by boat or automobile, or the world markets will plummet into a financial situation like none other in recent history. The only hope left for airlines is to either find a way of reducing the cost of fuel (a very temporary fix as we are heading towards peak production of oil) or to find an alternative form of energy. Both instances seem equally unlikely for the near-future, as gas prices are not a question of demand as much as supply (in that the suppliers have complete control over demand) and powering a Boeing 777 Airliner takes a little more than bio diesel.
http://www.usatoday.com/travel/flights/2009-01-29-profit-loss-airlines_N.htm
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