The International Air Transport Association will next week raise its forecast for 2009 industry losses as the deteriorating global economic conditions further hit demand for air travel and cargo, said Director-General Giovanni Bisignani.
“Unfortunately, it will be a significant increase” in 2009 losses, he told reporters after speaking at a business luncheon Just look at the numbers. January (global) passenger traffic was down 5.6 percent. Premium traffic, where airlines make their money, was off 16.7 percent and cargo is a disaster with a 23.3 percent fall,” he said.
In December, IATA forecast a $2.5 billion loss for 2009 based on fuel price of $60 a barrel, a 3 percent drop in passenger demand and a 5 percent drop in cargo.
The group said recently that airline losses exceeded $4 billion in the fourth quarter last year, pointing to total losses in 2008 of up to $8 billion, far more than the $5 billion it previously estimated. That bodes poorly for the current year.
Bisignani said a global economy recovery could take place next year but it will be tough for airlines to be profitable.
Crude oil prices have plunged and world airlines expect to save $30 billion in fuel cost this year but he said there was no immediate relief for some carriers who had hedged fuel at higher prices.
He said the industry remained in red ink for six years after the Sept. 11, 2001, terrorist attacks in the United States, and it could take longer for them to recover from the current global economic malaise.
Asia is expected to be the worst performing region as its carriers, which account for 44 percent of the world cargo market, were badly hit by sharper-than-expected slump in its three key markets — China, India and Japan, he said.
IATA, a Geneva-based group that represents 230 airline companies worldwide, repeated its call for greater industry liberalization to give greater commercial freedom for airlines to serve global markets more efficiently.
“Government protection has made air transport vulnerable to economic shocks. Today’s crisis should send a strong message to governments that we must modernize the rules of the game,” Bisignani said.
More than 700 industry leaders will gather in Kuala Lumpur in June for IATA’s annual meeting and a world air transport conference to discuss plans to speed up recovery for the sector, he said.
“Fasten your seat belt. There is turbulence ahead but we will land safely,” he added.
