MARK PILING LONDON
Europe's charter carriers are rapidly adjusting their capacity downwards for summer 2002 in the face of declining bookings. But with many leisure travellers holding off on holiday plans, next year's traffic levels are far from certain.
The sector's lobby group, the International Air Carrier Association (IACA), says the closure of airspace following the 11 September terrorist attacks cost its members €88.4 million ($78 million), while extra insurance charges of at least $145 million per year are expected. With bookings down by an average of 20-40% for winter 2001 and summer 2002, capacity reductions and proportionate staffing level reductions of 10-20% are on the cards.
The carrier most at risk, LTU, has been rescued. The loss-making German carrier, Europe's third largest charter airline, was one of the Swissair share-holdings that helped to force the airline into bankruptcy. Amid protests against state aid from Lufthansa and JMC Airlines parent Thomas Cook, Swissair has sold its 49.9% stake in LTU for c1 to the Stadtsparkasses Dusseldorf bank, in a deal backed by credit guarantees from the German regional government of North Rhine-Westphalia. LTUwill now receive a cash injection of $45 million from its second largest shareholder retail group Rewe and begin a cost-cutting plan.
In the UK, JMC Airlines and Air 2000 are looking to their employees to help them out of the current crisis. Air 2000 pilots have agreed to take a temporary 5% paycut, which will be repaid later in 2002, to save some 50 pilot jobs out of the 387 total.
JMC, which will close three of its 10 bases in the UK, is asking staff to take a voluntary 5% paycut - alongside 15% by management - to bring down the number of redundancies it is likely to make, said managing director Mohamed El-Borai. It plans to offload aircraft from its fleet of 29 next summer by leasing five Airbus A320s to sister company Thomas Cook Belgium. Although El-Borai acknowledes that "everything for next summer is a guess right now", JMC will not cut its transatlantic capacity, he said at the launch of the first of its two new Airbus A330-200s.
Within the Preussag group, the UK's Britannia Airways and Germany's Hapag- Lloyd are co-operating on aircraft utilisation and maintenance to ensure all cost-savings and efficiency opportunities are taken. To date, Britannia has received no cancellations in its winter schedule, and summer 2002 is unchanged, although tour operators are still assessing how they will react, says the company.
Source: Airline Business
