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Higher fares and lower labor costs will help the global airline industry combat soaring jet-fuel prices and trim its losses in 2006, an industry group said Wednesday.
The head of the Geneva-based International Air Transport Association, Giovanni Bisignani, projected a $2.2 billion loss for the global airline industry in 2006, down from $6 billion in 2005, as profitability among European and Asian carriers is expected to offset narrower losses for U.S. airlines.
Bisignani spoke at an industry luncheon in New York. A copy of his speech was posted on the association’s Web site.
Bisignani forecast that U.S. airlines will lose $5.4 billion in 2006, assuming world oil prices average $57 a barrel. In 2005, U.S. carriers lost some $10.8 billion (excluding United’s $16.7 billion fourth-quarter restructuring costs) on average oil prices of more than $56 a barrel.
The soaring price of jet fuel, along with inefficient operations, helped thrust money-losing U.S. carriers into Chapter 11 last year, including Delta and Northwest, which are still restructuring under the protection of a bankruptcy court.
High fuel prices are likely to stick around, Bisignani said, though he blamed the petroleum industry for contributing to the problem by not investing enough of its profits in new refining capacity.
•A Sony Corp. game executive rebuffed concerns Wednesday that the PlayStation 3’s delayed launch would put it at a competitive disadvantage to the already available Xbox 360 game console.
“We have a tremendous piece of hardware … and great creativity,” Phil Harrison, president of Sony Computer Entertainment’s Worldwide Studios, told an assembly of reporters at the Game Developer Conference. “I have no concerns about the competition.”
The worldwide launch will now take place in November instead of the expected staggered launch, first in Japan in the spring followed by North America.
•Three executives from South Korea’s Samsung Electronics Co. agreed to plead guilty and serve jail time for participating in a conspiracy to fix the price of computer memory chips, the U.S. Justice Department said Wednesday.
Each executive agreed to pay a $250,000 fine, cooperate with federal authorities on the investigation and serve prison sentences ranging from seven to eight months for their role in a scheme to raise prices for dynamic random access memory, or DRAM, from 1999 to 2002.