Thursday, February 26, 2009

major economies

This Major Economies Meeting is taking place in Paris, France, April 17 and 18, and is the third official “Major Economies Meeting” (MEM)

The first MEM was held in Washington, DC in September 2007. Reactions by foreign officials to the September meeting expressed disappointment in the lack of new initiatives put forward by the Bush administration, and general ambivalence about continued participation in such meetings. Participation in a second meeting was conditioned upon a successful conclusion of UNFCCC talks in Bali. The second MEM was held in Honolulu, Hawaii in January 2008. Reactions to this meeting were less negative than the first, indicating that there has been useful exchange of ideas, but no tangible outcomes. An informal MEM was also held in Chiba, Japan in March 2008, with a small subset of participant countries focused on drafting a leaders’ statement possibly to be released this summer.
The Paris proceedings are largely closed to the press and completely closed to NGO participation. Requests for NGO observer status were denied.

16 Participants have been invited—Australia, Brazil, Canada, China, the European Union, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, South Africa, South Korea, and the United Kingdom
The countries most at risk from impacts of climate change – the least-developed and small island developing countries – are not even invited to be at the table for this conference. In total, over 160 UN countries are excluded.

A workshop will be held in conjunction with the Paris MEM to explore “sectoral” approaches to climate change. The Bush Administration and Japan have been strong proponents of addressing climate change emissions from specific sectors. This idea has not been widely accepted and there is no shared or established understanding about what is meant by a sectoral approach, how it would relate to a binding national target for developed countries, and how it would apply to developing country emissions. The 1-day workshop was organized by the French government and the French think tank IDDRI and will take place in the Centre de Conferences International on April 16th.


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Treasury Market

Todays core treasury systems must be able to handle hundreds of thousands of trades exchanged by banks, financial institutions and corporate treasuries. In addition to standard foreign exchange and money market transactions, support for more advanced products such as equities and derivatives are generally required.

Financial institutions are also striving to:

• Gain compliance with the latest regulations such as new accounting standards IAS39, FAS133, Basel II and Sarbannes Oxley. These regulations have forced organisations to review their treasury management applications to ensure they follow the latest requirements and recommendations for hedge accounting, securitisation and risk management.
• Reduce costs - margins have reduced considerably on many treasury trades, yet many financial institutions are faced with increased competition that is compounding the need to reduce costs and streamline operations. Many financial institutions are therefore seeking to centralize their operations and rationalise systems to improve STP and lower costs.


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U.S. Treasury Market

The United States Treasury market is generally considered the world’s second most efficient financial market (after foreign exchange). As the chairman of the SEC put it, “Treasury markets today exhibit an extraordinary combination of high liquidity and low transaction costs.” While the current system does handle many simple Treasury trades very efficiently, many large ones arising from transactions in other markets are subjected to significant costs because of dealer front-running, market manipulation, and gouging. These practices are well known to most experienced market participants, but as I have not seen them publicly discussed or acted upon by regulators I would like to try to describe both their general characteristics and some market data I recorded to illustrate their application in specific transactions. I will conclude with a few thoughts on how these practices could be reduced in the Treasury market and an extrapolation to other financial markets.

By all appearances, the Treasury market approaches the requirements of economists’ perfect competition in perfect markets: price-takers (the market has hundreds of participants contributing to liquidity) executing costless transactions (the bid-offer spread averages about one-quarter of a basis point, customers pay no commissions to trade with dealers, and dealers pay less than $10 per million to trade with interdealer brokers [IDBs]) in perfect communication (live bid, offer, and traded prices are available through Telerate, Reuters, and Bloomberg), thus achieving instantaneous equilibrium (screens go blank for only a few seconds after major news releases). An experienced money manager seeking to buy or sell a small to moderate amount of a benchmark Treasury (the most recently auctioned bill, note, or bond for a given maturity) can pick up one of his direct wires to primary dealers and, within a few seconds, usually execute a trade off of the same offers or bids he observes on the live pages of Cantor Fitzgerald (the largest Treasury broker) or GovPX (a display-only composite of the best prices at the other IDBs). If he does not like the prices he gets by calling one dealer, he can put several in competition on each trade.

Large trades carry the potential for front-running, though it should more accurately be called “simul-running,” because of the speed of benchmark trades (some traders increase their lead-time by hitting bids [selling] or lifting offers [buying] in the brokers’ screens as soon as a customer’s direct wire flashes based on an educated guess—frequently obvious—as to which way he is going). Competition on large trades may bring more than razor-fine markets. Traders usually do not like to miss on these inquiries because large market shares require hitting on them. So every time a customer buys a block by putting four dealers in competition, three traders have an interest in the market quickly moving against the winning dealer in order to caution other dealers against aggressive pricing on future trades and show their own firms’ trading managers and salespeople that it was a good miss (knowing when and how to miss, preferably gracefully, is an essential skill for a market maker). If the purchase is large enough and the market is well bid, one or more of the losing traders may attempt to push it up, pressuring the winning dealer to cover his sale at a loss. Some customers try to police such “back-running” since it leads to inferior pricing, but it is even harder to detect and deter than front-running.
If he decides that policing his dealers is more trouble than the information and liquidity (and entertainment) they provide is worth, he can open an account with Cantor (the other IDBs restrict who may trade with them) and bypass dealers whenever he chooses. There is a problem with this tactic: at any given moment other IDBs may have a better or collectively deeper (good for more size) bid or offer than Cantor.

The market for non-benchmark (off-the-run or OTR) Treasuries is only slightly more difficult for customers to navigate. OTRs trade on yield spreads to adjacent benchmark Treasuries. Most IDBs display active, and frequently very tight (approximately two-tenths of a basis point) dealer markets in swap boxes. However, these spread markets are displayed in price terms versus a fixed price for the appropriate benchmark (updated when the outright market moves significantly) and therefore do not appear in GovPX, preventing customers from seeing live markets in OTRs. Cantor, whose screens are directly visible by non-dealers, has periodically attempted posting outright OTR prices derived from swap spreads but has had limited success because dealers (still Cantor’s dominant customers) are reluctant to give Cantor the necessary spread markets and quick to protest outright OTR markets based on others’ spread markets.

While GovPX does display continuously updated estimates of OTR bids and offers corresponding to current market levels of the appropriate benchmarks, this is a poor substitute for the live price-action seen by dealers on the individual IDB screens. (The same complaint applies, to a lesser extent, for benchmark Treasuries: GovPX shows that a 100-19 bid for the ten-year was hit; it does not show whether all the 100-19 bids were hit. This can be a meaningful distinction.) Consider the customer trying to determine if his request for a bid on a block of an OTR is being front-run. Since GovPX does not display swap-box trades, the customer has no way of seeing if the trader at the first dealer he calls immediately hits the best swap-box bid for that security, yet the bids he receives from each dealer he subsequently calls (whose traders will know exactly what happened) will suffer as a result. Whether the trader at the first dealer bids the customer off of the swap-box spread he sold or off of a wider spread depends on several factors: how many of the OTR he was able to sell through the IDB at the original spread, whether he likes owning the OTR at that spread, how good a shopper he judges the customer, and whether he is under pressure from his boss to execute that customer’s inquiries or achieve broad market-share targets. If he does choose to bid off the original spread, hitting the swap-box bid may have at least reduced the probability that another dealer will match his bid. Note that the first dealer’s front-running may help non-front-running dealers by reducing the price required to win the trade. For most customers, awareness of OTR front-running depends on another dealer reporting swap-box activity to them. However, since customers have no way to prove which dealer (or dealers, for more than one may trade ahead of a customer on a given inquiry) is guilty, attempts at disciplining dealers are necessarily imprecise.

Despite these problems, the experienced money manager who follows OTR spreads continually, not just when he needs to trade them, does not telegraph his intentions, and uses dealers intelligently can buy or sell OTR Treasuries on very tight markets. Indeed, many traders grumble that they are required to provide favored customers with more liquidity than they themselves receive from other dealers through the IDBs. (They also point out that dealers are not the only ones to employ questionable tactics: some customers simultaneously execute identical large trades with several dealers, virtually guaranteeing that the market quickly moves against them.)



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Fed Policy-Makers Concerned About Rate Hike Impacts on Economy

WASHINGTON — Federal Reserve policy-makers at their August meeting halted their rate-raising campaign for the first time in two years, expressing concern that they didn't want to push up rates too much and hurt the economy.
By taking a breather, the Fed would have time to assess the toll on economic activity and inflation of its 17 rate increases since 2004, according to minutes of the Fed's Aug. 8 meeting, released Tuesday. It can take time for rate increases to work their way through the economy.
"The full effect of previous increases in interest rates on activity and prices probably had not yet been felt, and a pause was viewed as appropriate to limit the risks of tightening too much," the minutes said.

The Fed's goal is to push up rates to thwart inflation but not so much as to cripple economic activity. It's a tricky task, economists say.
Fed chief Ben Bernanke and all but one of his central bank colleagues voted to hold the federal funds rate steady at 5.25 percent at the August meeting. The funds rate, the interest banks charge each other on overnight loans, affects a variety of other interest rates charged to businesses and consumers. It is the Fed's main tool to influence the economy.


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Structure of the FOMC

The Federal Open Market Committee (FOMC) consists of twelve members--the seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis. The rotating seats are filled from the following four groups of Banks, one Bank president from each group: Boston, Philadelphia, and Richmond; Cleveland and Chicago; Atlanta, St. Louis, and Dallas; and Minneapolis, Kansas City, and San Francisco. Nonvoting Reserve Bank presidents attend the meetings of the Committee, participate in the discussions, and contribute to the Committee's assessment of the economy and policy options.

The FOMC holds eight regularly scheduled meetings per year. At these meetings, the Committee reviews economic and financial conditions, determines the appropriate stance of monetary policy, and assesses the risks to its long-run goals of price stability and sustainable economic growth.


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Wednesday, February 25, 2009

World Economic Forum

Gaza Campaign and Israel’s Security

Testaments are violated and solemn promises broken by the custodians of the Promised Land on the pretext of securing the state of Israel from the rockets and mortars and to restore Israel's deterrent credibility which was seriously discredited by the Lebanon fiasco. However, it has been aptly argued by many analysts that the real intent and purpose of Israel's unleashing this reign of terror is the creation of ‘Greater Israel' . It is hell bent upon controlling all of what was used to be known as the Mandate Palestine, which includes Gaza and the West Bank. As per the pernicious scheme, the Palestinians would have limited autonomy in a handful of ‘disconnected and economically rippled enclaves', one of which is Gaza. Israel would control the ‘borders around them, the air above and the water below them' (John Meirsheimer, "Another War, Another Defeat" , The American Conservative, 2009.) One of the corollaries of the scheme is to instill in the minds of the Palestinians that they are the defeated people thereby having no choice but to surrender their future to the Israelis.
The primary aim of Israel's military campaign was to neutralize Hamas's ability to carry out rocket attacks against Israel, but it also led to the death of more than 1300 Palestinians, wounding even a greater number of them and destroying at least 41 Mosques besides wiping out the already antiquated and overloaded infrastructure in Gaza. Damage to vital infrastructure, including many roads, bridges, hospitals and power stations, has severely limited local capacity to care for the injured and displaced. UNDP has already warned that Gaza campaign and the collateral damage will have long term impact on Palestinians.

Security Council Resolution 1860(2009) called on the international community to alleviate the humanitarian and economic situation in Gaza. The United Nations is about to unveil a US $ 613 million aid appeal for war-torn Gaza. The funding will be used to provide food, shelter, healthcare and other assistance to victims of Israel's 22-day attack on the Palestinian territory, said John Holmes, chief of the U.N. Office for the Coordination of Humanitarian Affairs. According to the agency, an assessment on the long-term needs in the conflict-hit territory is already underway. The Resolution called for an immediate, durable and fully respected cease-fire, leading to the full withdrawal of Israeli troops from Gaza.

Israeli claims have been that Hamas consistently violated the ceasefire that it so ‘diligently' observed, therefore leaving it with no other choice but to destroy Hamas's capacity to launch missiles into southern Israel. The claim does not hold water in the face of record. Israel, not Hamas, violated the truce. As per the understanding, Hamas was to stop missile attacks on Israel, and in return the latter was bound to ease its iron grip on Gaza. Ironically Israel tightened it further. (Henry Siegman, "Israel's Lies" , London Review of Books, 29 January, 2009). This was confirmed by many neutral observers and NGOs operating there. Even Brigadier General (Res.) Shamuel Zakai, a former Commander of IDF's Gaza Division, accused the Israeli government of making a ‘central error' during the six months period of truce i.e. ‘failing to take advantage of the calm to improve, rather than markedly worsen, the economic plight of the Palestinians of the Strip……….you cannot just land blows, leave the Palestinians in Gaza in the economic distress, they are in, and expect that Hamas will just sit around and do nothing' (Interview in Ha'artz on 22 December, 2008).

Israel would have tactically won the war against the defenceless Palestinians, but its strategy of making Israel securer is nowhere in sight. The timing of the war was in narrow terms well calculated by its architects. Many observers are of the opinion that even if Israel is successful in uprooting or expelling Hamas from Gaza, which is a remote possibility in the face of the ‘we are all Hamas' phenomenon, it will be replaced by a more radical and ferocious organization taking up the flag of resistance. Such a group may establish its links with Al Qa'ida as well. Ironically some Israeli newspapers have absurdly attempted to create a kinship between Hamas and the latter. This is a mistake, says Ephraim Halevy, the former head of Mossad and Sharon's national security adviser, because {The Hamas Political Bureau Chief, Khalid} Mashal's declaration diametrically contradicts Al Qa'ida's approach, and provides Israel with an opportunity, perhaps a historic one, to leverage it for the better. Most of the observers are of the opinion that the results of the campaign have been inconclusive for Israel – even in terms of its immediate aim of preventing Hamas or any other group to fire rockets into it. Its wider strategic implications, moreover, are far from comforting. ( Paul Rogers, "After Gaza: Israel's Last Chance)
Israel has to understand that it can continue flouting international understandings and conventions in total disregard to the international public opinion yet it would do so only at the expense of its security both in the longer and shorter run, further vitiating the prospects of its viability and both external and internal security in the hostile environment. Gaza offensive meted out a serious setback to the euphoria in the Arab world in general, and Saudi Arab in particular about the success of the peace process spearheaded by Saudi Arabia. The latter urged its ally the United States to intervene in order to end Israel's attack on Gaza. "Superpowers should take responsibility to stop these attacks," the official Saudi Press Agency reported, citing a telephone conversation between Saudi King Abdullah and U.S. President George W. Bush.
Israel is also fast losing its erstwhile friends and strategic allies. Its attempts to barter peace deals with the surrounding states may also flounder on this very count. Syrian sponsorship of Hamas has had an enormous impact on the group's operational capacities. Since the mid-1990s, Damascus has been the operational headquarters of the Hamas military wing and a nexus for the transfer of external funds to Hamas operatives in the territories.

Syria and Syrian-occupied Lebanon have become major conduits for funneling weapons and explosives to Hamas and safe havens for training hundreds of its operatives. (Middle East Intelligence Unit. http://www.meib.org/articles/0210_s1.htm) Israel has the bargaining chip of Golan Heights which it had wrested and occupied from Syria in the 1967 War. In fact Turkey had been mediating the process between the two bitter enemies for a year. The idea was to create a more peaceful or at least predictable neighbourhood for Israel before tackling the increasingly complex Palestinian problem. Now in the wake of the Gaza offensive, the talks have been stalled and Syria has bitterly condemned the Israeli attacks.
Yet another fallout of the same had been a spectacular public criticism of Israel by the Turkish Prime Minister Recep Tayyip Erdogan at the World Economic Forum in Davos. Turkey is one of the regional countries that have the closest ties with Israel besides Egypt. It has struck arms procurement deals with Israel as well. Turkish Prime Minister Recep Tayyip Erdogan went to the extent of demanding American President to declare Israel as a terrorist state for its unleashing a reign of terror on the innocent civilian Palestinians. As a mark of protest against the partisan treatment/behaviour of the moderator of the programme at the World Economic Forum, the Prime Minister walked out of the debate. Later in an interview to the Newsweek, Tayyip Erdogan termed Gaza as an ‘open air prison' . In response to a query, he said, ‘Hamas is a political party and not an "arm of Iran" or for that matter of Syria. As a matter of fact, the international community has not respected the Palestinians' verdict.

On the one side, it wishes to flourish democracy in the Middle East, and on the other it doesn't respect the ballot box results.
"If the whole world had given [Hamas] the chance of becoming a political player maybe they would not be in a situation like this after the elections that they won."


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Gateway returns to UK computer market

The Gateway brand is now owned by Acer, the third largest PC vendor worldwide and the second largest in Europe. While Gateway will continue to sell to consumers in the US, it will be purely focused on the professional market in the EMEA region and will sell solely via dealer channels, the company said.

"We will offer to the professional market real effective solutions for their needs," said Antonio Papale, director of the Gateway Division in EMEA.
He added that the company's strategy will be to offer a limited portfolio of models that meet customer needs, backed by IT support services delivered over the web.
Gateway sees the dealer channel as key to its success. Kevin O'Donoghue, product business manager, explained that Acer had a great deal of engineering expertise at the back end, but that the dealers had more knowledge of what their customers wanted.

"We want our channel partners to have a direct influence on development of our line-up," he said.
As part of this strategy, Gateway will host a set of managed services that will enable dealers to offer customers remote monitoring and management of the systems they sell, adding value in what has otherwise become a commodity market.
"A lot of IT staff time is wasted just fixing common problems and in maintenance. What value does this have? None. If a dealer can take this burden away from them, they can focus on running their business," said O'Donoghue.
The initial Gateway line-up will consist of three laptops and desktops. The laptops are the NO20 with a 12.1in display and the NO50 and NS50 with 15.4in displays, while the desktop line-up is the DU10, DS10 and DT10, in small form factor (SFF), desktop and tower chassis, respectively. All the desktops are quad-core Intel-based models.
In the second quarter of this year, the line-up will be expanded with three dual-Xeon servers, 19in and 22in monitors and availability of the managed services.
The launch of a new PC vendor in the midst of the current economic climate is a risk, but Acer seems to be taking a long-term view about its investment in the Gateway brand.

When asked when Gateway expected to show a profit, O'Donoghue said: "You can't measure success or failure within six months or even a year on something like this."
He added that the company "wanted to become a visible player" within the European business market.
Gateway, formerly Gateway 2000, was a prominent PC vendor in the UK during the latter half of the 90s, rivalling Dell in sales volumes. Following the dot-com slump, the company abruptly pulled the plug on its UK and Ireland operations. O'Donoghue said he did not think the company would be adversely affected by past events.


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General Motors GM’s Opel Unit May Be Next ‘Domino’ After Saab

General Motors Corp.’s decision to push its Saab unit into bankruptcy protection puts pressure on Germany, the U.K. and Spain to come up with funding that the U.S. company says is needed to save the rest of its European business.
Saab filed for creditor protection yesterday after GM said it would cut ties with the Swedish carmaker following two decades of losses. Hours later, Opel supervisory-board member Armin Schild said the Ruesselsheim, Germany-based unit needs a rescue package that may exceed 3.3 billion euros ($4.23 billion).
“The Saab filing creates fear of a domino effect,” said Ferdinand Dudenhoeffer, director of automotive research at the University of Duisburg-Essen. “It increases pressure on Opel because GM has shown it cannot absorb its units’ debts.”
Opel employs 50,000 people across Europe, more than 10 times the number at Saab. About half the workforce is in Germany, where Finance Minister Peer Steinbrueck said yesterday he’s opposed to taking a stake in order to save the division. GM says it needs $6 billion from foreign governments and must reach an agreement to shave $1.2 billion from European labor costs by March 31.
Detroit-based GM said Jan. 11 that, in addition to talks with Germany, it’s also in touch with governments in Spain, where it employs more than 7,200 people, and the U.K., headquarters to Opel’s Vauxhall brand, with a workforce of almost 5,000.

March 31 Deadline
GM has set March 31 for deciding on all its European divisions’ future as the carmaker seeks as much as $16.6 billion in new U.S. federal loans. The U.S. company will end financial support for Saab by Jan. 1. Opel division and Luton, England- based Vauxhall are integral to operations, GM has said.
Opel plants in Bochum and Eisenach, Germany, face the greatest threat, together with another in Antwerp, Belgium, where the division employs another 3,700 people, a person familiar with the situation told Bloomberg this past week.
Saab’s move to seek protection from creditors “creates a sense of urgency” at Opel, said Laurenz Meyer, a lawmaker and economics spokesman with Chancellor Angela Merkel’s ruling Christian Democrats.
GM must specify its plans for Opel before Germany can tailor a rescue package, said Birgit Diezel, finance minister for the state of Thuringia, where Eisenach is located. Germany’s federal government and four states where Opel has factories are looking at options including loan guarantees, direct investment and the recruitment of foreign partners to support the unit, she said.

‘Concrete Negotiations’
“We’re in concrete negotiations with all parties involved,” said Diezel, also a Christian Democrat, adding that Thuringia “will use all options” to secure the future of the Eisenach factory and its 1,900 workers.
Opel may be unable to pay its bill by as early as May if no bank provides the carmaker with the necessary loans, the newspaper Bild Zeitung said today, citing estimates of the committee for guarantees, a body that contains members of the federal and state governments. The committee expects Opel will need 1.1 billion euros of additional capital because of likely losses through 2011, Bild reported.
Some members of Merkel’s Christian Democrats oppose government guarantees for Opel. Kurt Lauk, head of a pro- business group in Merkel’s party, told the Tagesspiegel newspaper that Opel won’t operate profitably in the long term because it lacks an effective business model. His fellow party member Michael Fuchs told the newspaper Berliner Zeitung there is the risk of aid going directly to the U.S.

‘Dramatic’ Situation
“The Saab filing very clearly shows how dramatic the situation is,” said Christoph Stuermer, an analyst at IHS Global Insight research company in Frankfurt.
Opel may also lose out because it had planned to build the new Saab 9-5 sedan, Stuermer said. Still, should Trollhaettan- based Saab survive a three-month “reconstruction” under court supervision, the Swedish company may play a role in a more independent Opel, he said. As GM’s only European brand with market recognition in the U.S., Saab could offer Opel a chance to “re-skin” its products for the world’s biggest auto market.
The Swedish government, too, is keeping GM at arms length, reiterating yesterday that it doesn’t plan to risk taxpayers’ money on Saab. Prime Minister Fredrik Reinfeldt said Feb. 18 the U.S. company’s demands amounted to a “trap” set to pressure the government into granting aid.


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International Air Transport Association

Air travel drops in December

Premium tickets down 13.3%, economy seats down 5.3% in December, says International Air Transport Association.
GENEVA (Reuters) -- Airlines sold far fewer business and first-class seats in December, though economy travel in the Christmas period was buoyed somewhat by tickets bought before economic gloom set in, a global industry body said on Wednesday.
The International Air Transport Association said "premium" traffic was 13.3% lower in December than the same month in 2007, following the 11.5% year-on-year drop seen in November.
"This precipitous fall has been driven by the abrupt decline in business activity and international trade around the world," IATA said in its latest Premium Traffic Monitor.
Asia had the largest drop, with Far East flights filling 25.1% fewer top-tier seats compared to the year before, said the Geneva-based IATA, which represents 230 airlines including British Airways, Cathay Pacific and United Airlines (UAUA, Fortune 500).
Singapore Airlines, the biggest airline by market value, said on Monday it was cutting capacity by 11% in the year from April due to waning travel and cargo demand.
Overall, December premium traffic fell 8.8% in the North Atlantic region, 16.3% in Europe and 4.2% in the Middle East, according to IATA's data, which excludes domestic flights.
Africa was an exception with 11.8% year-on-year premium traffic growth in December.
Economy class fares better
In economy class, the picture was less bleak. Some 5.3% fewer people took cross-border flights in December compared to the year before.
"Leisure trips at this time of the year may well have been pre-booked before the full extent of the recession was apparent, so an accelerated fall in economy travel numbers should be expected in January," IATA said.
"With jobs being lost at an increasing rate during January and consumer confidence falling further it seems that the bottom has not been reached for air travel and even weaker numbers may become evidence in the first few months of this year."
For 2008 as a whole, IATA said premium travel fell 2.8% while economy travel rose 0.9%.
Because economy tickets represent more than 90% of all tickets sold, overall passenger numbers on international markets flown by IATA airlines grew 0.5% last year.
Although sliding oil and jet fuel prices have given airlines some respite, IATA said weakening passenger and cargo demand has created new problems, causing both fares and yields to drop.
Premium tickets normally make up about 8% of total passenger numbers but 15% to 20% of revenues. IATA said airlines saw a 20% drop in premium revenues in December, which if sustained could cut 3% or $15 billion from the airline industry's annual revenues.


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Ryanair plans to drop check-in desks

Ryanair plans to save costs by closing all of its airport check-in desks by the end of the year and have passengers check in online instead.

All we will have is a bag drop where passengers can drop off their luggage, otherwise everything will be done online," Ryanair chief executive Michael O'Leary said.
He said the savings would be passed on to passengers in the form of lower fares.
Ryanair spokesman Stephen McNamara said that 75pc of the airline's passenger already used its online check-in services.
"We are trying to encourage the remaining 25pc to do the same," he said.
"Hopefully by the end of the year we will have bag drop-in areas instead, which will be manned."
The airline would continue to have staff running ticket desks at airports, he said.



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