Global airline sector will take three years to recover, says IATA
The outlook for the ailing global aviation industry remains bleak and a full recovery may take at least three years, said Giovanni Bisignani, the director general for International Air Transport Association (IATA).
Speaking to reporters in Kuala Lumpur ahead of the association's annual general meeting between June 7-9, the head of IATA said, "The (global) economy isn't moving forward despite some optimism in the financial market. The industry is still in a difficult situation. Premium traffic hasn't improved. It's difficult to imagine" profits for the airline industry in the next couple of years."
He pointed out that that there has been an alarming decline in traffic, especially in cargo demand and urged governments to adopt open skies policies and further deregulate trans-Atlantic air travel in order to pull out of the current crisis.
According to Mr Bisignani, global passenger demand had fallen by 7.5% between January and April, with Asian carriers leading the plunge with an 11% decline.
Global premium air traffic – the most lucrative business for airlines – was down 19% in March but plunged 29% in Asia.
He added that freight has remained at 'shockingly low' levels, down almost 22% from a year ago, with Asia cargo demand down by 25%.
Mr Bisignani noted that 50 major airlines had reported US$3.3 billion in cumulated net losses in the first quarter of 2009 alone.
IATA said its new industry forecast for 2009 to be announced on June 8 will be "substantially worse" than the March estimate of losses of US$4.7 billion in the wake of rising fuel prices and new threat to global travel from the H1N1 flu.
Jet fuel, which is the biggest cost component for airline operators has seen prices climbed to about $66 a barrel after falling to as low as $32.4 on Dec. 19.
Meanwhile, H1N1 flu virus has spread to 66 countries since April, the same month the International Monetary Fund (IMF) said the global economy would shrink 1.3% in 2009.
It is estimated that airlines worldwide lost as much as $8.5 billion in 2008, with leading carriers such as British Airways, Hong Kong's Cathay Pacific Airways and Japan Airlines Corp all posting losses.
IATA's 230 members account for 93% of scheduled international air traffic.
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