Airlines are set to suffer bigger than expected losses of US$5.6 billion next year despite a recovery in passenger traffic, the air transport industry association IATA said yesterday.
“The association revised its financial outlook for 2010 to an expected US$5.6 billion global net loss, larger than the previously forecast loss of US$3.8 billion,” IATA said in a statement.
The figure nonetheless marked a halving of the US$11 billion losses airlines are expected to suffer this year as a patchy economic recovery slowly gains ground.
“We are ending an annus horribilis that rings to a close the 10 challenging years of an aviation decennus horribilis,” IATA director-general Giovanni Bisignani said.
“Between 2000 and 2009, airlines lost US$49.1 billion, which is an average of US$5 billion per year,” he added.
Passenger demand is expected to grow by a stronger than expected 4.5 percent, following a decline of 4.1 percent this year, as passenger numbers return to the 2007 peak next year with an estimated 2.28 billion passengers.
“The worst is behind us,” Bisignani said. “Demand will likely continue to improve and airlines are expected to drive down non-fuel unit costs by 1.3 percent.”
“But fuel costs are rising and yields are a continuing disaster,” Bisignani told journalists.
Emerging markets were leading the improving economic climate, but the recovery was at its weakest and slowest in the biggest air travel markets in Europe and across the Atlantic, IATA chief economist Brian Pearce said.
IATA officials warned that significant cuts, including on wages, would be the norm.
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