Shredding money

摘要

The airline industry dodged two bullets this week. The rescue of AIG, once the world's biggest insurer, also saved its subsidiary, ILFC, a market leader in aircraft-leasing. As a result 900 planes did not fall into the hands of the receivers, which would have caused confusion and disruption to dozens of airlines around the world. The second escape has been the lower oil price, which sent shares in America's beleaguered carriers soaring, despite the turmoil on Wall Street. But high oil prices had already turned last year's combined second-quarter profits of $2.4 billion for the six biggest carriers into losses of $1.77 billion. Only Northwest and Delta (which are soon to merge) stayed in profit. And with the world economy faltering the easing of the oil price provides only scant relief. Many airlines have been sheltering from three-digit oil in hedges that will soon unwind, exposing them to market prices.rnAt least 30 airlines have gone bust this year, and IATA, the industry's trade body, reckons its 230 members will lose about $5.2 billion in total, having made a rare collective profit of $5.6 billion in 2007, following $40 billion of losses since 2001. It is not just oil that has piled on the pressure. Investors got tough with struggling carriers as credit tightened. So the industry that survived assaults from terrorism and SARS is being undermined by the financial crisis.