THE INTERNATIONAL Air Transport Association (IATA) announced a revised outlook for the global air transport industry with losses of $4.7 billion in 2009. This is significantly worse than IATA's December forecast for a $2.5 billion loss in 2009, reflecting the rapid deterioration of the global economic conditions. Industry revenues are expected to fall by 12 per cent ($62 billion) to $467 billion. "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. Our loss forecast for 2009 is now $4.7 billion. Combined with an industry debt of $170 billion, the pressure on the industry balance sheet is extreme," said Giovanni Bisignani, IATA's director general and CEO. Demand is projected to fall sharply with passenger traffic expected to contract by 5.7 per cent over the year. Revenue will experience an even sharper fall due to the fall in premium traffic. Cargo demand is expected to decline by 13 per cent. Yields are expected to drop by 4.3 per cent. IATA also revised its forecast losses for 2008 from $5 billion to $8.5 billion. The fourth quarter of 2008 was particularly difficult as carriers reported large hedging-related losses and a very sharp fall in premium travel and cargo traffic. The Middle East will be the only region with demand growth in 2009 (+1.2 per cent). But this will be overshadowed by the impact of a 3.8 per cent increase in capacity. While this is significantly below the double-digit growth of previous years, the region continues to add capacity ahead of demand. The result is expected to be a loss of $900 million (a slight deterioration from the $800 million loss recorded in 2008).
