ENCOURAGED BY THE LATE SUMMER fall in oil prices, the International Air Transport Association (IATA) has revised downwards its estimate of airline losses this year to US$5.2 billion.
The association also calculated that, although jet fuel prices could be lower next year, the worsening global economy would continue to drag profits down, and 2009 losses will be around US$4.1 billion.
"The situation remains bleak," said IATA director general Giovanni Bisignani. "The toxic combination of high oil prices and falling demand continues to poison the industry's profi tability. We expect losses of US$5.2 billion this year."
European airlines will be particularly hard hit. IATA reckons profits will fall from US$2.1 billion in 2007 to just US$300 million in 2008. Asia-Pacific airline profits will drop to a similar level, from US$900 million. North American airlines will be worst hit - IATA is predicting losses will account for US$5 billion of the total.
"To cure the structural sickness of the industry, we need a strong dose of liberalisation," Bisignani concluded.
"Simply weathering the current storm is not an option. We must take the opportunity of these extraordinary times to facilitate extraordinary change to strengthen the industry with commercial freedoms."