IATA declares worst environment in 50 years
The global airline industry could stand to lose US$2.5bn next year, according to one transport association.
The International Air Transport Association (IATA) released its 2009 forecast, predicting losses in all regions except the US.
Industry revenues are expected to drop from US$536bn to US$501bn, the first fall since 2002 according to the IATA.
Europe and Asia-Pacific could be the worst hit, with predicted losses of US$1bn and US$1.1bn respectively.
Passenger traffic could suffer a 3% decline, following the 2% growth seen in 2008.
"The outlook is bleak. The chronic industry crisis will continue into 2009," said Giovanni Bisignani, IATA's director general and ceo. "We face the worst revenue environment in 50 years."
But the IATA offered a glimmer of hope with oil predicted to cost US$60 per barrel. This is equivalent to a US$142bn industry bill, US$32bn less than in 2009.
It also adjusted its 2008 forecast from a loss of US$5.2bn to US$5bn, factoring in the decline in fuel prices.
The 2009 forecast is largely down to North American carriers, hardest hit by the high oil prices and expected to post industry losses of US$3.9bn this year.
But the IATA said the dropping fuel prices and their lack of hedging will benefit US carriers the most in 2009, making it the only region to post a profit.
"North America will be the only region in the black, but the expected US$300m profit is less than 1% of their revenue. 2009 will be another tough year for everyone," said Mr Bisignani.
Losses in Europe next year will be ten times that of 2008 due to recession and a weakened Euro.
Carriers in the Middle East, Africa and South America will be hit by smaller losses of US$200m, US$300m and US$200m respectively, the figures said.
"The industry remains sick. And it will take changes beyond the control of airlines to navigate back into profitable territory," said Mr Bisignani.
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