Wednesday, September 16, 2009

IATA Predict Heavier Than Anticipated Losses for Airlines

Last two years ‘worse than 9/11’
Shipping News Feature

WORLDWIDE - The International Air Transport Association (IATA) yesterday announced that it was revising its global financial forecast for airline losses in 2009. The figure has been amended to an estimation of losses totalling US$11 billion this year. This is US$2 billion worse than the previously projected US$9 billion.

The new projections are due to rising fuel prices and exceptionally weak yields. Industry revenues for the year are expected to fall by US$80 billion (15%) to US$455 billion compared with 2008 levels.

The organisation has also revised its loss estimates for 2008 from a loss of US$10.4 billion to US$16.8 billion.

Giovanni Bisignani, IATA’s Director General and CEO, said that: “The bottom line of this crisis - with combined 2008-9 losses at US$27.8 billion - is larger than the impact of 9/11.

“This is not a short-term shock. US$80 billion will disappear from the industry’s top line. That 15% of lost revenue will take years to recover. Conserving cash, careful capacity management and cutting costs are the keys to survival. The global economic storm may be abating, but airlines have not yet found safe harbour. The crisis continues,” he added.

IATA also expects losses to continue into 2010, with the industry anticipated to report a US$3.8 billion net loss for that year.