Geneva: The global airline industry can expect a bleak 2009, with sector-wide losses of about $2.5 billion despite deep cost cuts by US carriers last year, the International Air Transport Association said Tuesday.
IATA chief executive Giovanni Bisignani told reporters in Geneva that next year would be the worst revenue environment in 50 years, but that US carriers, many of which have already slashed capacity and cut staff as high oil prices sapped revenue during 2008 could still turn a modest profit next year.
“North America will be the only region in the black, but the expected $300 million profit is less than 1 percent of their revenue,” Bisignani said. “2009 will be another tough year for everyone.”
IATA forecasts that passenger traffic will drop 3 % in 2009, the first decline since 2001 when the terrorist attacks on the United States abruptly slowed global air traffic by 2.7 %.
Lower oil prices will help cushion the blow, with the average cost per barrel next year predicted to hover around $60, translating into an industrywide fuel bill of $142 billion.
“This is $32 billion lower than in 2008 when oil averaged $100 per barrel,” Bisignani said.
In fact, lower oil prices will help overall industry losses to narrow from 2008, when IATA now expects a loss of $5 billion. That is slightly lower than the $5.2 billion it had predicted in September and is due to the rapid decline in fuel prices.
Cargo traffic will drop 5 % in 2009 following a decline of 1.5 % in 2008. This compares with a 6 % drop in 2001.