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World Airlines Suffer 3rd Year of Big Losses : Travel: The red ink for 1990 through 1992 is expected to total $9 billion, a trade organization says. American carriers are the hardest hit.

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From Associated Press

Airlines around the world are suffering their third successive year of multibillion-dollar losses in their worst performance ever, the International Air Transport Assn. said.

Hardest hit are U.S. airlines, battered by fare wars and a decline in domestic travel, said Guenther Eser, the industry group’s director general.

“The situation domestically in the United States for the airline industry is terrible,” Eser said Sunday. “Half of all our losses of the 213 (IATA member) airlines are practically the five, six big airlines in the United States.”

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A sign of the world industry’s hard times is that airlines from a number of countries have parked 900 planes in the deserts of the U.S. Southwest, where the dry climate will keep them from deteriorating until they are needed again, he said. Some of the planes were sent to Arizona straight off the production line.

Many airlines also are drastically cutting the size of their staffs, he added. Some 52,000 people, or 3.4% of all staffs, lost their jobs in 1991. That number is expected to be much higher this year. Total figures are not yet available.

“I don’t have to tell you that the air transport industry is doing very badly,” Eser said at IATA headquarters in Geneva ahead of the association’s annual meeting in Montreal today and Tuesday. “It’s going through its worst-ever time.”

IATA, whose member airlines carry 98% of all scheduled international traffic, said in its annual report that a slow recovery began this year, but Eser said he didn’t expect a solid turnaround until 1994.

Eser forecast that IATA members would lose at least $2.5 billion on their international operations this year. This comes on top of a record loss of $4 billion during 1991, when the Gulf War curbed air travel.

In 1990, which was affected by the buildup to the war, losses were $2.7 billion.

Losses for the first three years of the 1990s exceed $9 billion, “more than all the profits the airlines made in the 1980s,” he said.

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Other problems hurting the airlines have been the world recession and higher fuel prices, Eser said.

“After the Gulf War, we had expected that especially the business people would fly again, as they did before the gulf crisis,” said Eser. “This was not the case. The recession is all over, and they cannot afford to fly.”

The airline industry is one of the first to feel a recession and one of the last to recover, he said. “When people are looking for ways to save money in a recession, one of the first is not to buy a new car or not to fly.”

Eser said he expected many airlines to overcome current problems and disagreed with forecasts that only four or five European airlines would survive. But he foresees an increase in cooperative arrangements and alliances among airlines.

Under such arrangements, airlines run joint ticketing and boarding operations.

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