| | |  Business News | June 2009 
Global Airlines Forecast to Post $9 Billion Loss for 2009
 Kyodo News International
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June 08, 2009
Kuala Lumpur - The global airline industry is forecast to lose $9 billion this year, the International Air Transport Association said Monday, nearly doubling its earlier projection as worldwide economic slump and fears about the new flu sent the industry into a tailspin.
"There is no modern precedent for today's economic meltdown.
The ground has shifted. Our industry has been shaken," IATA Director General Giovanni Bisignani said in a statement released at the trade group annual meeting at the Malaysian capital.
Revenue is expected to plunge an unprecedented 15 percent to $448 billion this year from $528 billion in 2008. Air cargo, a key indicator of economic health, could fall by 17 percent to 33.3 million tons of freight compared with 40.1 million tons last year.
Passenger demand is also expected to contract by 8 percent to 2.06 billion travelers against 2.24 billion in 2008.
Fuel bills, however, are projected to decline by $59 billion to $106 billion this year as fuel prices drop. Fuel will account for 23 percent of operating costs with oil prices averaging $56 per barrel.
By comparison, the 2008 fuel bill was $165 billion, accounting for 31 percent of costs with oil prices averaging $99 per barrel.
The skyrocketing fuel prices of 2008 had pushed IATA to revise its loss estimate for the year to $10.4 billion from the previous estimate of $8.5 billion.
"The risk that we have seen in recent weeks is that even the slightest glimmer of economic hope sends oil prices higher. Greedy speculation must not hold the global economy hostage. Failure to act by governments would be irresponsible," Bisignani said.
In his speech delivered at the annual meeting, Bisignani also warned of overcapacity in the industry during this crisis time.
"Once again aircraft ordered in good times are being delivered in recession. About 4,000 aircraft are scheduled for delivery over the next three years which is 17 percent of current fleet. Finding customers to fill them profitably will be a challenge," he said.
To lift the industry out of the gloom, Bisignani urged more liberalization of capital and markets. He also wanted airports to reduce charges.
IATA represents some 230 airlines which cover 93 percent of air traffic.
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