Airline Woes Despite Recent Huge Fall In Kerosene Prices

More grim news out today about the World’s airlines. It is not just British Airways (BA) heading for big losses, but Cathay Pacific (CPCAY.PK), Delta (DAL) and a host of others across the world. Although Lufthansa (LHAN.F) have managed small profit.

In related new, Easyjet (EZJ.L) has complained about the EU’s possible decision to relax the ‘use it or lose it’ approach to airline slots. I am on Easyjet’s side, if airlines can’t use their slots economically they should give it up to those that can. This is pure flag carrier protectionism once again.

What is perhaps most surprising to me is just how badly airlines are doing considering the huge falls in kerosene seen in the past few months. Many airlines have hedged positions (not Lufthansa, unsurprisingly) too far into the future and are not feeling the full benefits of the drop, but still, to have nearly 1/3rd wiped off your cost base and still lose money says a lot for sheer scale of the decline in traffic.

At least the global warming crowd will be happy as less planes fill the sky for the next few years.

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