{"text":[[{"start":9.1,"text":"Airlines are preparing to slash their winter flight schedules, with the potential for planes to be grounded and tens of thousands of flights cancelled if jet fuel prices remain elevated."}],[{"start":18.65,"text":"Executives will decide within weeks how to steer their airlines through the final months of a tumultuous year that has led to soaring fuel prices after the Iran war upended global travel."}],[{"start":30.799999999999997,"text":"ITA chief executive Joerg Eberhart told the FT the Italian airline may have to cut up to a fifth of its capacity during the winter season — which runs from October to April — in a worst-case scenario. He predicted some players may need to seek government aid."}],[{"start":47,"text":"“It all depends on the development of the situation,” he said. “Maybe there will have to be some help from governments, we don’t know yet . . . there are many moving parts.”"}],[{"start":56.95,"text":"Analysts warn an economic squeeze could combine with rising prices to put people off flying during what are already industry’s leanest months."}],[{"start":66.4,"text":"“You can imagine the end of the year is actually really tough if the fuel price goes up again,” said Steve Saxon, partner at McKinsey. If that happened, “the winter is fairly ugly”."}],[{"start":76.60000000000001,"text":"This week, industry body Iata slashed its forecasts for the year, saying global profits would halve from $43bn to $23bn."}],[{"start":86.10000000000001,"text":"At its annual gathering of industry executives, held this year in Rio de Janeiro, the mood was sombre. Many airlines will adapt — but they were already businesses with “wafer-thin margins”, Iata director-general Willie Walsh warned at the event."}],[{"start":101.55000000000001,"text":"The industry’s fuel hit comes after several stellar years for the sector, when a post-pandemic travel boom and rising spending on premium and business-class seats helped buoy profits."}],[{"start":113.70000000000002,"text":"But the current price surge has come at a time when consumers across many economies are feeling squeezed by inflation and the high cost of living. Companies will need to look at the wider economic picture when making decisions."}],[{"start":126.80000000000001,"text":"“You need to make sure you’re filling every seat,” said one industry adviser. “You can’t fly planes that are empty.” "}],[{"start":133.4,"text":"Iata this week warned the industry faced an additional $100bn fuel bill, even if prices began to drop towards the end of the year as is currently forecast. If the conflict continues, and prices remain high, things could be worse."}],[{"start":148.3,"text":"Juichi Hirasawa, chief executive of Japan’s ANA, predicted fuel prices would come back to where they were. However, “if this fuel price actually stays where it currently is, we will have internal discussions”, he said. "}],[{"start":161.05,"text":"So much of the decision hinges on the jet fuel price. Turkish Airlines, one of the world’s biggest international carriers, expects prices will drop from about $1,400 per tonne to below $1,000 at the end of the year, giving an average cost of roughly $1,200 for the year."}],[{"start":181.25,"text":"“If it improves faster . . . we don’t need to make any change to our winter schedule,” said chair Murat Şeker. “But if the escalated levels of the jet fuel continue past July until, say, September, then we’ll start making frequency cuts or even stop destinations, stop operating in certain cities.”"}],[{"start":201.5,"text":"He said the airline could make a final decision as late as one month before it would act on impacted flights."}],[{"start":208.05,"text":"Many of the airlines outside of the US are hedged, which has protected them from the worst of the rises. But finance chiefs face the question of when to start taking out new long-term contracts, which lock their carriers into paying higher prices even if the situation recovers."}],[{"start":225.20000000000002,"text":"“For the first part of winter until the end of the year we are covered, but this is only two months,” ITA’s Eberhart said. “The real problem starts then in January.”"}],[{"start":236.25000000000003,"text":"The industry has had one major bankruptcy this year, after struggling US carrier Spirit went under weeks after the conflict started. Executives expect more to come, especially if costs stay high."}],[{"start":250.15000000000003,"text":"Roberto Alvo, head of Latam Airlines, warned: “If we see high fuel prices towards the end of the year, I think that balance sheets of the weaker carriers, which have tried to withstand the impact, are going to start to suffer a little bit more.”"}],[{"start":264.35,"text":"Executives face the need to reduce capacity, but cut too much, and they risk losing the ability to bounce back."}],[{"start":271.55,"text":"Lessons from the pandemic, when flying dropped to zero, helped inform this choice, said Jeffrey Goh, a former head of Gulf Air who now leads Alton Aviation Consultancy."}],[{"start":281.75,"text":"He said: “How do you prepare? Are you going to put your aircraft in the desert and then it takes a while to restart the aircraft again? Or are you going to fly [at] an operating loss just to make sure that you are in the air?”"}],[{"start":294.3,"text":"As they home in on possible cuts, the largest players have the advantage."}],[{"start":299.15000000000003,"text":"Şeker at Turkish Airlines said the carrier’s widespread network meant it could “easily adjust the capacity to some other destinations”."}],[{"start":307.05,"text":"Not all the indicators are bad. Despite price rises, some executives have been pleasantly surprised by the resilience of travellers."}],[{"start":314.3,"text":"“It’s all driven by demand,” said Peter Carter, president of Delta Air Lines. “The economy is quite strong, and I feel that is one of the under-reported stories . . . It is remarkable that the economies that we rely on for our business are strong.”"}],[{"start":329.2,"text":"Luis Gallego, chief executive of British Airways’ owner IAG, said the airline group viewed demand in the July to September quarter as “still strong”."}],[{"start":338.65,"text":"While the carrier was closely following the impact of high fuel prices and fares on demand, “for the time being, we don’t see any weakness”, he said."}],[{"start":347.79999999999995,"text":"Airlines customarily cut prices to drive bookings. But current high fares and relatively firm demand were helping them claw back the costs of jet fuel."}],[{"start":357.15,"text":"“It’s one of those that I’m watching really closely,” said Nat Pieper, chief commercial officer at American Airlines, of its fare increases. “I really don’t want to get caught too small and not take full advantage of the revenue goodness as long as it lasts.”"}],[{"start":379.79999999999995,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1781085035_6121.mp3"}