The world's airlines are headed for a combined loss of $5-7 billion on international routes this year as the ripples of economic slowdown and September 11th 2001 spread across the industry, a top airline group has said.
The International Air Transport Association (IATA) had previously forecast losses on international scheduled flights in a $3-7 billion range but data from its members, the airlines, now led to pessimism, the group's chief economist Mr Peter Morris said.
A slowing world economy has led to deep cuts in corporate spending and a sharp drop in business travel. The attacks in the United States scared off many travellers and has particularly hurt business on key transatlantic routes.
"This year we are seeing something like a $5-7 billion loss on international scheduled services but this is very heavily weighted towards North American carriers," Mr Morris told an air industry conference in London today.
"It's possible that there could be a recovery next year, something like a very small surplus," he said, pencilling in a figure of around $2 billion after interest payments.
Facing their worst crisis since the Gulf War a decade ago, airlines have slashed jobs and routes. Some carriers have gone under. IATA has said that the possibility of a war in Iraq poses a major threat to the industry's recovery.