Airline losses worldwide this year will be wider than expected as the global recession saps demand for travel and business-class fares, according to the International Air Transport Association (IATA).
The group's new industry forecast for 2009, to be announced on June 8, will be "substantially worse" than the March estimate of losses of $4.7 billion, IATA Chief Executive Officer Giovanni Bisignani said in Kuala Lumpur today.
"The economy isn't moving forward despite some optimism in the financial market," he told reporters in the Malaysian capital, where IATA will hold its annual meeting next week.
"The industry is still in a difficult situation. Premium traffic hasn't improved."
Airlines, which IATA says lost as much as $8.5 billion in 2008, are shedding jobs, cutting routes and grounding planes to survive a global slowdown that has pushed British Airways Plc, Hong Kong's Cathay Pacific Airways Ltd. and Japan Airlines Corp. to losses.
Cargo demand, the clearest way to gauge the effect of a slowing economy, also hasn't improved, Mr Bisignani
said today.
"The global economy hasn't started to recover, while more bad things like swine flu are spreading," said Jack
Xu, an analyst at Sinopac Securities in Shanghai. "Meanwhile, oil has started to rise again."
Bloomberg