Some Iranian airlines are operating at a financial loss or small profit and cannot build up the reserves of profit necessary to pay for new aircraft or improve services.

Despite the challenges over the past 30 years, including the problem of illegal sanctions, it is business as usual for the airline industry of Iran.
Indeed, it is a tribute to the ingenuity of the Iranian government and the people that they have managed to extend proper air services thus far.
However, it is usual to think that nationwide plans exist to improve transport services but whereas there is no shortage of work being carried out on upgrading roads and underground metro systems, Iran’s domestic air service seems to be forgotten service.
The lack of planning is becoming increasingly visible in the queue at ticket counters resulting from the shortage of seats. There is an increase in demand, stemming in part from a rise in population, concerns over quality of roads and road safety, gasoline rationing and the distance and terrain of Iran resulting in long journeys by road or slow journeys by rail coupled with growing aspiration of people to enjoy a twenty-first century lifestyle; All of those make people think of travelling by air as a safe and fast alternative.
Yet at the same time the low airline capacity due to the age of the aircraft in service and the difficulty in replacing aircraft due to availability and lack of capital in obtaining aircraft and the necessary parts and support; resulting in a decrease in productive output.
In recent comment in Donya-e-Eqtesad, the managing director of Aseman Airlines said it could now deliver only 70 percent of the capacity that it should have from its fleet due mainly to aircraft waiting for repair.
In most markets, the price of the service is determined by the balance of supply and demand but government sets the price of domestic air fares.
Whilst this appears to be a public policy that reduces the cost of living, in fact the consequence is that some airlines are operating at a financial loss or small profit and are unable to build up the reserves of profit necessary to pay for new aircraft or improve services in any other way.
And in order to keep planes flying and compensate for the public service of providing flights to small or remote destinations the government is forced to make crisis payments and subsidy on fuel to the airlines to offset losses but these hand-outs are neither predictable nor adequate to pay for new planes, nor do they compensate for the loss incurred by the airlines charging a proper price for tickets in the first place.
But at the same time only some 3 percent of the population have the privilege of travelling by air. Therefore, the burden of these subsidies that is placed on the whole population benefits only the fraction of the society that can afford to fly even if the tickets were sold at a normal market price.
The shortage of tickets affects all travelers, whether for business or necessary day-to-day purposes; but over and above the sheer inconvenience and the frustration of standing in queues waiting for last-minute stand-by seats, one major result is the damage caused to the economy by lost hours of work or the in contracts not completed on time or meetings cancelled.
There are some 120 planes in Iranian air fleet and Iran needs an additional 30 percent increase in capacity is needed just to meet present demand, let alone cope with predicted future growth.
Iran needs its airlines to be healthy, safe and profitable and the government must cooperate with the airlines to find the means to make that possible.

Corporations are shifting from denial on climate change to wanting to have influence on future regulations that they know are now inevitable.

There appears to be hope for the planet yet. After much urging and dire threats, the global economy, much like a stubborn and temperamental toddler, is starting to reluctantly turn towards sustainability, according to the “State of the World 2008“ report released by the Worldwatch Institute.
“Innovative green efforts by governments and business are becoming commonplace,“ said Gary Gardner of Worldwatch, a US-based environmental think tank.
“While green projects are no longer marginal, they are still a long ways from being mainstream,“ Gardner, co-director of the report, an annual summary that usually focuses on documenting environmental declines around the world, told Ipsnews.net.
The report describes a host of new economic opportunities that are attracting capital. An estimated 52 billion dollars was invested in renewable energy in 2006, up 33 percent from 2005. Preliminary estimates indicate that the figure reached 66 billion dollars in 2007. Carbon trading is growing even more explosively, reaching an estimated 30 billion dollars in 2006, nearly triple the amount traded in 2005.
“Renewable energy is close to taking off on its own. It doesn’t need much help from environmentalists any more,“ Gardner said.
Green announcements now come daily. Last month, Virginia Tech University said that it had teamed up with a private investor, Hannon Armstrong, to put 100 million dollars a year into improving the energy efficiency of Washington area buildings. In May, Citigroup (also known as Citi), one of the world’s largest banks, announced plans to invest 50 billion dollars to address climate change over the next decade.
That squarely contradicts the fact that Citgroup is the leading financier of fossil fuel energy and the world’s top financier of coal, which is the chief source of climate-altering emissions from the US and in other countries.
Is Citigroup’s promise to address climate change what’s known as “greenwash“, or a sincere effort to do business sustainably?
And what of General Motors’ recent efforts to urge the US to pass legislation regulating greenhouse gas emissions that are also highlighted in the report?
“GM and other corporations are shifting from denial on climate change to wanting to have influence on future regulations that they know are now inevitable,“ Gardner said.
However, he added, “The majority of activities by many of the corporations and countries cited in this report are bad for the environment.“
But rather than focus on the business-as-usual operations that ignore the environment entirely, this year’s report tries to document the rising tide of green efforts that may mark the real birth of a sustainable global economy.
What is a sustainable economy? It is one that relies on renewable energy, recycles so effectively that there is near zero waste, emits few if any toxins and meets the needs of the poorest people, suggests Gardener.
The rapid growth of microfinance--short-term loans of often just a few hundred dollars--has had a considerable impact in developing countries, the report finds.
It also produces excellent returns for lenders, so much so that Citigroup--yes, them again--is now one of the largest financiers. Corporatisation of microfinance may bode good or ill, Gardner says.
“Corporations and governments are only just starting to learn what a sustainable economy is,“ he added.
They’ve been slow learners. It is more than 30 years since the 1987 Bruntland Report titled “Our Common Future“, where world leaders set sustainable development as the goal for the world economy.
Continued human progress now depends on an economic transformation that is more profound than any seen in the last century.

The International Monetary Fund (IMF) continues to burden its borrowers with superfluous demands despite efforts to streamline loans, an internal watchdog has found.
“Progress had been made in better aligning IMF conditionality to its core areas of responsibility and expertise, but about one-third of conditions continued to reach outside these areas,“ said Tom Bernes, director of the fund’s Independent Evaluation Office.
According to AP, the findings seem bound to fuel criticism that the IMF has arrogated unto itself the power to set terms beyond its formal mandate. In particular, evaluators are urging the fund to ease or jettison demands that borrowers transfer public services and enterprises to private owners.
Requiring governments to sell off utilities, health and educational institutions, or national industries is a contentious business. In some borrowing countries, security forces have clashed with citizens concerned about job losses and price hikes for basic goods and services.
Yet, according to the evaluators, the IMF staff has succeeded in ensuring that loan conditions increasingly reflect core concerns about macroeconomic stability. Rather, the sprawl--some call it “mission creep“--is largely the fault of the agency’s wealthy shareholders.
Donor countries impose conditions with little relevance to the IMF’s remit, evaluators found. Instead, terms are designed to enable donors to track their own, separate aid programmes and to ensure borrowers meet their benchmarks for debt relief or for entry into the European Union.
The extraneous conditions often are detailed and intrusive, some going as far as dictating legislative proposals to borrowing countries’ parliaments.
In consequence, an initiative launched in 2000 to reduce the volume and scope of conditions has had little impact. The effort, and guidelines issued two years later, required that demands be made sparingly and be limited to those considered critical to programme goals.
“The streamlining initiative did not reduce the volume of conditionality, partly because structural conditions continued to be used to monitor other initiatives such as donors’ support programmes and the European Union accession process,“ the evaluation office said in a report released late last week.
The new evaluation of loans between 1995 and 2004 found that the number of structural conditions in IMF-supported programmes came to an average of about 17 a year. The figure did not change after 2000.
“Overall, the analysis underscores that achieving the objectives of parsimony and criticality remains an important challenge for the fund, and greater efforts are needed in this direction,“ said Bernes. Wealthy IMF members’ appetite for binding borrowers’ hands appears to be proving counter-productive.
“Most of these conditions had little structural depth and only about half of them were met on time,“ the report said. “Compliance was only weakly correlated with subsequent progress in structural reform.“
Evaluators recommended limiting the number of conditions to four or five a year.
“The use of structural benchmarks should be discontinued and measures with low structural content should not be part of conditionality. Normally, conditionality should be restricted to the core areas of IMF expertise,“ the report said.
Anything else, it added, should be left to the fund’s sibling, the World Bank. Additionally, monitoring and evaluation must be improved to “provide a more robust basis for assessing program results“.

China’s stock market has been forecast to remain bullish in 2008 but might dip in the medium-and short-term, the Chinese Academy of Science said in its latest report.
The market would face a tight fund supply since several medium and small companies had gone public every week since October 2007, it said.
According to Xinhua.net, since November 2007, more large and small shareholders of previously non-tradable shares sold their shares, the value of which exceeded 200 million yuan ($27.5 million).
Generally, a bullish market cycle lasts from 17 to 24 months, but China’s bullish market had continued for 29 months from June 6, 2005, to November 2007.
The report, however, pointed out the stock market would remain bullish this year in a whole after the correction.
The Chinese economy would continue its rapid growth over the next few years and the earning growth of listed companies was expected to exceed 20 percent or even 30 percent in 2008, the report said.
As long as the Chinese currency of Renminbi continued to appreciate, the bullish stock market will not end, it said.
Many stocks might undergo correction but still had the possibility of going up, the report said.