New Delhi: Painting a gloomy picture for the global aviation industry in 2008-09, the International Air Transport Association (IATA) forecast a collective industry loss of $5.2 billion in 2008, saying 26 carriers had gone bust so far.
The latest airline to file bankruptcy protection was the Italian national carrier Alitalia, which took the step last week, said IATA’s Director General Giovanni Bisignani.
“The situation remains bleak. The toxic combination of high oil prices and falling demand continues to poison the industry’s profitability. We expect losses of $5.2 billion this year,” he said in a teleconference from Montreal.
Maintaining that 26 carriers had folded up worldwide due to the acute financial crunch, the IATA Chief said “more airlines have gone bust in 2008 than in the aftermath of 9/11” and a massive 1,80,000 jobs lost in the civil aviation sector.
“It is a $500 billion industry that suffers a debt of $190 billion. So the financial situation is much weaker than after 9/11,” said the Chief of IATA, which represents over 200 major airlines across the world.
Asked whether it was the right time for airlines to cut base fares and fuel surcharges now that the oil prices have come down, he said though there is some relief, “the year-to- date average is $113 per barrel. That is 40 dollars more than $73 a barrel average in 2007.”
This has pushed the industry fuel bill up by $50 billion to $186 billion this year,“ he said, adding that fuel bill was expected to rise to 36% of total operating cost of the industry compared with 13 per cent in 2002.