2009 airlines losses seen at $4.7 billion

25 March 2009

The International Air Transport Association (IATA) forecast on Tuesday a loss of $4.7 billion for the world's airline industry in 2009 which is almost double compared to the $2.5 billion loss forecast in December.

IATA expects the slump in passenger and cargo traffic worldwide to continue further as a result of the global recession.

IATA anticipates a 12 per cent ($62 billion) fall in revenue to $467 billion in 2009 which is worse than the industry had seen in the aftermath of the 9/11 between 2000 and 2002, when the decline was about 7 per cent ($23 billion).

''The state of the airline industry today is grim,'' said IATA director general and CEO Giovanni Bisignani in Geneva. ''Demand has deteriorated much more rapidly with the economic slowdown than could have been anticipated even a few months ago…Combined with an industry debt of $170 billion, the pressure on the industry balance sheet is extreme.''

IATA expects passenger traffic to shrink by 5.7 per cent over the year with even sharper fall in the premium segment which is the main revenue support. Cargo demand too is expected to drop to 13 per cent. Both the figures are significantly lower than the December forecast of 3 per cent drop in passenger demand and 5 per cent decline in cargo.

The yield is expected to fall by 4.3 per cent as airlines are unable to cut capacity at the rate at which demand is falling.