Future looks bleak for aviation predicts IATA
09 / 12 / 2008
THE International Air Transport Association (IATA) has forecast an industry loss of US$2.5 billion for 2009. This will be due to industry revenues falling $35 billion from $536 billion for 2008 for the first time since 2002. In addition, cargo traffic will fall five per cent, following a drop of 1.5 per cent in 2008.
“The outlook is bleak,” said Giovanni Bisignani, IATA’s director general and chief executive officer. “The chronic industry crisis will continue into 2009 with $2.5 billion in losses. We face the worst revenue environment in 50 years.”
Fortunately, the 2009 oil price is expected to average $60 per barrel for a total bill of $142 billion thereby cushioning the blow. This is $32 billion lower than in 2008 when oil averaged $100 per barrel. However, the effect will be slight compared to expected losses.
“Air cargo comprises 35 per cent of value of goods traded internationally. The 7.9 per cent decline in October is a clear indication that the worst is yet to come – for airlines and the slowing global economy,” said Bisignani.
“Airlines have done a remarkable job of restructuring themselves since 2001 but the ferocity of the economic crisis has overshadowed these gains and airlines are struggling to match capacity. The industry remains sick. And it will take changes beyond the control of airlines to navigate back into profitable territory.”
Bisignani outlined an industry action plan for 2009 that reflected the Association’s Istanbul Declaration in June of this year. “Labour must understand that jobs will disappear when costs don’t come down. Industry partners must contribute to efficiency gains. And governments must stop crazy taxation, fix the infrastructure, give airlines normal commercial freedoms and effectively regulate monopoly suppliers.”