More woes for airline industry as losses to soar in 2010
The International Air Transport Association (IATA) is forecasting big losses for the airline industry next year but added that “the worst is likely behind us”.
According to the industry body, airlines will suffer losses of $5.6 billion (£3.5 billion) in 2010 – an increase from the $3.8 billion it originally predicted.
IATA said that European airlines are expected to lose the most money next year, while North American airlines would be likely to lose a total of $2 billion.
However, on a positive note, carriers in the Asia-Pacific are likely to see the biggest improvement, while Latin American airlines are expected to be the only profitable regional group.
Meanwhile, the body is forecasting that passenger numbers will return to pre-recession levels, but revenues from passengers will be $30 billion less than in 2007.
Giovanni Bisignani, director-general of the IATA, said: “The worst is behind us… but fuel costs are rising and yields are a continuing disaster.”
However, he added that “consolidation is the great hope for the industry”.
The forecast from the IATA comes just a day after it emerged that British Airways staff will press ahead with a 12-day strike commencing on December 22. It is estimated that the strike could cost the airline £30 million a day.
The airline industry has been struggling amid the global economic downturn which led to a severe slump in demand. Many airlines have been forced out of business as fewer people are travelling by air.