IATA says airline industry to lose $9 billion in 2009
08 Jun 2009
Kuala Lumpur: IATA, a representative organisation of the airline industry, delivered some dire predictions on Monday saying global airlines were likely to lose $9 billion this year. Just three months back, in March, the International Air Transport Association had predicted that the airline industry would lose $4.7 billion for 2009. It also revised its estimate of 2008 losses to $10.4 billion, up from $8.5 billion.
IATA chief Giovanni Bisignani made another dire prediction saying the global economic crisis would ensure that aviation industry's 2009 revenues would fall by $80 billion to $448 billion.
"This is the most difficult situation the industry has faced," Bisignani, IATA's director general and CEO, said at the aviation body's annual meeting in the Malaysian capital.
The airline industry's efforts at revival have been made worse by the recent outbreak of the H1N1 flu virus.
As an indicator of the way airlines perceive the market, Japan Airlines Corp (JAL), Asia's biggest carrier by revenues, has said it intended to cut capacity on international routes by 10 per cent in fiscal 2010. Other large Asian carriers, such as Cathay Pacific, said it was looking to defer deliveries of new planes for it did not foresee any signs of recovery.
Indian flag carrier, Air India, is also mulling deferrals. It has over $8 billion worth of planes on order from Boeing and Airbus, including 27 787 Dreamliners.
According to Bisignani, about 4,000 aircraft are due for delivery over the next three years. "Once again, aircraft ordered in good times are being delivered in recession. Finding customers to fill them will be a challenge," he said.
Touching on the issue of oil costs Bisignani asked governments to rein in oil prices. "The risk that we have seen in recent weeks is that even the slightest glimmer of economic hope sends oil prices higher," he said. "Greedy speculation must not hold the global economy hostage."
The industry fuel bill for 2009, according to IATA estimates, will decline to $106 billion in 2009, or 25 per cent of costs. In 2008 it was at $165 billion, or 31 per cent of costs.
