GENEVA, SWITZERLAND AND VARIOUS
Senior executives from about 60 international airlines opened an emergency meeting in Geneva on July 26 to consider cont-cutting measures aimed at arresting their industry's slump.
GENEVA, SWITZERLAND AND VARIOUS
1. GVs Planes on tarmac in Arizona (9 shots) 0.22
2. GVs & SVs Braniff Airlines counter with arrivals and departure (2 shots) 0.35
3. SVs Laker Airlines counter (4 shots) 0.53
4. Gv Boeing assembly line for 1000th 727 (14 shots) 1.46
5. SVs INTERIOR Orly airport, and Heathrow, passengers queueing (4 shots) 2.09
6. GV EXTERIOR Plane being refuelled (5 shots) 2.20
7. SCU Roy Watts, Chief Executive for British Airways speaking 2.47
8. GV EXTERIOR Hotel where IATA meeting is being held 2.51
9. SVs INTERIORS Meeting in progress (8 shots) 3.19
TRANSCRIPT: WATTS (SEQ. 7): "well it's my intention that it will be so. I'm in no Doubt that we have to dispose of our resources now and I am in no doubt that we have to get our unit costs down to compete in the current market place. This year we shall shed a lot of resources, sell a lot of property and airplanes worth may be 100, 150 million pounds and we shall reduce our actual labour bill next year by as much as 120 million pounds a years. so this year we shall remain solvent and next year we shall be profitable but I act now not tomorrow."
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Background: GENEVA, SWITZERLAND AND VARIOUS
Senior executives from about 60 international airlines opened an emergency meeting in Geneva on July 26 to consider cont-cutting measures aimed at arresting their industry's slump. tone of the major problems facing airlines is an over supply of planes which resulted from rapid expansion just before the oil-price boom of 1973-74. These planes in the Arizona desert have been grounded because the airlines find it cheaper to park them at less than then dollars a day than to fly them half empty at three thousand dollar an hour. By the late 1970's airlines became locked in a price war on popular routes such as the North Atlantic, in an attempt of attract more passengers. The result was increased losses as passenger demand and operating costs increased. Earlier this year two major airlines collapsed -- price-cutting Laker Airways in Britain and Brantiff International Airlines in the United States. Surviving fleets are also recording huge losses. The 116 members of the International Air Transport Association (IATA) lost 1.6 billion dollars last year. Interest payments on their bank loan, a crucial element due to the high cost of aircraft were 1.41 billion. The price of fuel is a major factor in the industry slump. Most aircraft were designed when fuel costs were low and passenger demand growing. The losses could be reduced by using newer, more fuel efficient planes, but most airlines cannot afford them. Some airlines such as British Airways have attempted to tackle the slump by cutting back on staff and selling planes. British Airways Managing Director Roy Watts who is chairing the two-day Geneva meeting was hopeful in 1981 that these economy measures would work. But those attending the IATA-sponsored meeting are discussing more drastic measure to save the industry. Fare increases of 15-16 per cent are being considered as well as ways of clamping down of ticket discounting. Delegates will also consider lobbying governments to reduce airport fees and eliminate flight patterns which for military or environmental reason
s force planes to fly fuel-wasting indirect routes.
Source: REUTERS LIBRARY AND SSR