AIRLINE INDUSTRY losses this year are expected to be nearly double the level forecast in December, as carriers are hit by steeply falling demand from premium passengers and record drops in cargo traffic.
“The state of the airline industry today is grim. Demand has deteriorated much more rapidly with the economic slowdown than could have been anticipated even a few months ago,” said Giovanni Bisignani, director-general of Iata, the airline industry trade association, yesterday. Relief from lower fuel prices had been “overshadowed by falling demand and plummeting revenues”, he said. “The industry is in intensive care.”
Net losses are forecast to reach $4.7 billion (€3.4 billion) this year, up from the $2.5 billion forecast in December, reflecting the rapid deterioration in global conditions.
Iata also revised its estimate for airline industry net losses for last year from $5 billion to $8.5 billion, as carriers were hit by the sudden and sharp fall in demand from premium passengers, where most network carriers generate the bulk of their profits, and from cargo.
Premium passenger numbers fell by almost 17 per cent in January year-on-year, while cargo traffic fell by 23 per cent.
Passenger traffic volumes are forecast to fall this year by 5.7 per cent, with cargo demand dropping by 13 per cent. Airlines are facing one of the biggest annual falls in revenues in 2009, with a drop of $62 billion to $467 billion.
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