Airlines expecting heavy losses
The world’s airlines will collectively lose $9bn in 2009 with revenues to shrink by $80bn from a year ago, as the economic crisis saps air travel and cargo demand, a key industry body warned today.
The International Air Transport Association said the revised loss estimate was nearly double the $4.7bn it forecast in March, reflecting a “rapidly deteriorating revenue environment”.
Although there has been growing signs of a bottoming out of the recession, Iata said the industry was severely hit in the first quarter with 50 major airlines reporting losses of more than $3bn.
Weak consumer confident, high business inventories and rising oil prices pose headwinds for future recovery, it said.
Revenues are expected to decline by an unprecedented 15% from a year ago to $448bn this year, and the weakness will persist into 2010, it said.
“There is no modern precedent for today’s economic meltdown. The ground has shifted. Our industry has been shaken. This is the most difficult situation that the industry has faced,” said Iata chief executive Giovanni Bisignani.
Iata, which represents 230 airlines worldwide, also raised its forecast loss for last year to $10.4bn, from $8.5bn previously.
It said passenger traffic for 2009 is expected to contract by 8% from a year ago to 2.06 billion travellers. Cargo demand will decline by 17%.
