Airlines' outlook worse than after 9/11: report

The financial outlook for the airline industry is worse today than it was in the aftermath of the Sept. 11 attacks, a group representing the industry says.

The International Air Transport Association says global airline losses will total $11 billion US in 2009. That's $2 billion worse than the agency's last estimate. 

With combined losses in 2008-09 of $27.8 billion, "the bottom line of this crisis … is larger than the impact of 9/11," IATA CEO Giovanni Bisignani said.

Worldwide, the airline industry lost $24.3 billion in 2001-02 after the attacks in New York and Washington.

Industry revenues for the year are expected to fall by $80 billion, or 15 per cent, to $455 billion compared with 2008 levels.

The body also revised the amount that the industry lost last year. Total losses for 2008 are now listed at $16.8 billion, worse than the previous figure of $10.4 billion.

The agency blames an increase in fuel prices and a decrease in demand for the mounting losses. But government focus on environmental issues and a reluctance to allow mergers are contributing to the losses, it said.

Regional discrepancies

Passenger traffic is expected to decline by four per cent for 2009 as a whole.

Regionally, Latin American and Middle Eastern carriers are expected to hold up comparatively well, breaking even in most cases or eking out small profits.

But carriers in Europe and North America are now forecast to double the losses that were anticipated for the year.

"The global economic storm may be abating, but airlines have not yet found safe harbour. The crisis continues," Bisignani said.