Global airline industry loss may rise to $4.7 bn
The International Air Transport Association (IATA)said that the global air transport industry would lose $4.7 bn in 2009, nearly double than its December forecast of a $2.5 bn loss for the current calendar year.
By ET Bureau |
NEW DELHI: The International Air Transport Association (IATA) has revised its loss forecast upward for the global aviation industry, reports Our Bureau. The apex industry body on Tuesday said that the global air transport industry would lose $4.7 bn in 2009, nearly double than its December forecast of a $2.5 bn loss for the current calendar year.
���Industry revenues are expected to fall by 12% to $467 billion, worse than after the 9/11 terror attack in the US,��� IATA said in a statement. ���Our loss forecast for 2009 is now $4.7 billion. Combined with an industry debt of $170 billion, the pressure on the industry���s balance sheet is extreme,��� said IATA director general Giovanni Bisignani.
As per the apex industry body estimate, the passenger demand is expected to further fall with traffic contracting. It fears that the revenue of airlines would erode more due to a sharp decline in the premium traffic. In 2009, cargo traffic, one of the main revenue generator for carriers, is expected to drop by 13%.
���Both (passenger demand and cargo demand) are significantly worse than the December forecast of a fall of 3% and 5%, respectively. Yields are expected to drop by 4.3%,��� the statement said.
The significant fall in the fuel prices over the last few months have helped airlines curb losses but the global recession has put huge pressures on the airline industry. With an expected fuel price of $50 per barrel (Brent oil), the industry���s fuel bill is expected to drop to 25% of operating costs (as compared to 32% in 2008 when oil averaged $99 per barrel).
Combined with lower demand, total expenditure on fuel is expected to fall to $116 billion in the current year. ���The prospects for airlines are dependant on the economic recovery. There is little to indicate an early end to the downturn. It will be a grim 2009,��� Mr Bisignani added.
���Industry revenues are expected to fall by 12% to $467 billion, worse than after the 9/11 terror attack in the US,��� IATA said in a statement. ���Our loss forecast for 2009 is now $4.7 billion. Combined with an industry debt of $170 billion, the pressure on the industry���s balance sheet is extreme,��� said IATA director general Giovanni Bisignani.
As per the apex industry body estimate, the passenger demand is expected to further fall with traffic contracting. It fears that the revenue of airlines would erode more due to a sharp decline in the premium traffic. In 2009, cargo traffic, one of the main revenue generator for carriers, is expected to drop by 13%.
���Both (passenger demand and cargo demand) are significantly worse than the December forecast of a fall of 3% and 5%, respectively. Yields are expected to drop by 4.3%,��� the statement said.
The significant fall in the fuel prices over the last few months have helped airlines curb losses but the global recession has put huge pressures on the airline industry. With an expected fuel price of $50 per barrel (Brent oil), the industry���s fuel bill is expected to drop to 25% of operating costs (as compared to 32% in 2008 when oil averaged $99 per barrel).
Combined with lower demand, total expenditure on fuel is expected to fall to $116 billion in the current year. ���The prospects for airlines are dependant on the economic recovery. There is little to indicate an early end to the downturn. It will be a grim 2009,��� Mr Bisignani added.
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