Airlines report smaller financial loses in 2002 - UN aviation agency

Despite falling demand and increased security costs for the airline industry last year, countries showed a small improvement in combined operating losses, according to preliminary estimates released by the United Nations civil aviation agency.

The International Civil Aviation Organization (ICAO) said scheduled airlines of its188 Member States experienced a combined operating loss of 2.3 per cent on revenues in 2002 - a small improvement compared to a loss of 3.8 per cent recorded the previous year.

Operating revenues for the same period are tentatively estimated at $312.5 billion, up 1.6 per cent over the previous year, while operating expenses are estimated at $319.8 billion, a marginal increase of 0.2 per cent.

These gains, according to ICAO, were achieved in the first complete year of falling demand and increased security and insurance costs for airlines following the 11 September 2001 terrorist attacks in New York.

The period covered was, however, prior to the full impact of subsequent armed conflict in Iraq, ongoing terrorist threats and Severe Acute Respiratory Syndrome (SARS), which have combined to have an unprecedented negative effect on the air transport industry, ICAO added.

The agency also noted considerable variations in regional results. "It is estimated that the airlines of the Asia-Pacific, Europe, Middle East and Africa regions achieved a small positive aggregate operating result, while airlines in the Latin America-Caribbean and North America regions showed both operating losses and the most significant declines in revenue yields," it said.