The International Air Transport Association (IATA) yesterday sharply increased its loss forecast for carriers to US$4.7 billion (3.4 billion euros) this year because of a “rapid deterioration of the global economic conditions.”
The new forecast given at the IATA’s annual media event marked a sharp rise from the US$2.5 in losses it predicted in December.
LAST YEAR
The industry group also raised its estimate of total airline losses for last year from US$8 billion to US$8.5 billion, blaming a “very sharp fall in premium travel and cargo travel.”
“The state of the airline industry today is grim,” IATA director general Giovanni Bisignani said. “Demand has deteriorated much more rapidly with the economic slowdown than could have been anticipated even a few months ago.”
“There is little to indicate an early end to the downturn,” he said, predicting a “grim 2009.”
Although the airline industry’s prospects may improve towards the end of the year, “expecting a significant recovery in 2010 would require more optimism than realism,” Bisignani said.
SLIDING DEMAND
Demand is expected to continue to slide, with passenger traffic shrinking by 5.7 percent over the year.
Asia-Pacific carriers are expected to post the biggest losses this year at US$1.7 billion as demand tumbles 6.8 percent.
European carriers are forecast to post US$1 billion in losses while Middle east carriers are seen losing US$900 million.
Only North American carriers would post a profit of US$100 million, as they benefit from sound capacity management and lower fuel prices, IATA said.
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