Airline industry to lose $11B in ‘09, group reports

Published 2:34 pm Tuesday, September 15, 2009

The airline industry’s losses are expected to top $11 billion in 2009, according to a report released today by the International Air Transport Association.

That’s up from the industry group’s previous loss estimate of $9 billion. IATA represents 230 airlines or 93 percent of scheduled international air traffic.

“The bottom line of this crisis – with combined 2008-9 losses at US$27.8 billion – is larger than the impact of 9/11,” said Giovanni Bisignani, IATA’s CEO. “This is not a short-term shock. US$80 billion will disappear from the industry’s top line. That 15% of lost revenue will take years to recover. …The global economic storm may be abating, but airlines have not yet found safe harbor.”

IATA predicts that passenger air travel will fall 4 percent in 2009 over 2008 and cargo traffic will decline 14 percent.

The group does not foresee the industry returning to profitability until 2011, at the earliest.

The bad news for jet makers Boeing and Airbus: large airlines with strong cash reserves still aren’t willing to fork over the money for newer fuel efficient jets. And smaller airlines don’t have the cash to buy.

In fact, Bisignani said, “We could see some casualties in the coming months.”

For more on the report, visit IATA’s Web site.