Global airline group predicts $11B industry losses this year

The International Air Transport Association released a revised global financial forecast Tuesday, predicting airline losses totaling $11 billion in 2009. This is $2 billion worse than the previously projected $9 billion loss due to rising fuel prices and weak demand.

Industry revenues for the year are expected to fall 15% to $455 billion.

"The bottom line of this crisis—with combined 2008-2009 losses at $27.8 billion—is larger than the impact of 9/11," says IATA CEO Giovanni Bisignani in a statement. "The global economic storm may be abating, but airlines have not yet found safe harbor."

Passenger traffic is expected to decline by 4% and cargo by 14% for 2009.

European carriers are expected to post the largest losses, $3.8 billion. IATA says key long-haul markets were hit by the world trade collapse and airport slot regulations "prevented a timely reduction in capacity."

North American carriers are expected to post losses of $2.6 billion, more than double the previously forecast loss of $1 billion. Their cuts in capacity matched the slump in demand, but recovery in travel is being held back by high unemployment and the prolonged economic slump, IATA says.

Asia-Pacific carriers will post losses of $3.6 billion. Latin American carriers are expected to break even, while Middle East airlines will likely see losses of $500 million.

IATA expects losses to continue into 2010, with the industry expected to report a $3.8 billion net loss next year.

Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
You Might Also Like...