Airlines to lose up to US$5b this year
The international airline industry will probably lose US$5 billion this year with a gloomy outlook for freight and passenger traffic, especially on routes linked to North America, according to the International Air Transport Association (Iata).
A 'painful adjustment' of capacity to weak demand would probably last through next year, but profitability would increase US$2 billion next year, it said.
'Industry losses on international flights will probably reach US$5 billion this year, concentrated on routes to and from within North America,' said Iata chief economist Peter Morris.
'The recovery next year depends on [gross domestic product] growth and corporate recovery, among other things.'
Global passenger traffic, freight traffic and fleet capacity dropped drastically since the third quarter last year. While the industry in the United States and Europe continues to retract overall, Asia has shown a more promising outlook as passenger and freight traffic and fleet capacity returned to positive growth.
According to the Iata Passenger Forecast, growth in Asia led the way, posting a comparative 4 per cent rise against 2000, the last strong year. The international average showed a 5 per cent contraction.
The outlook for North Atlantic and transpacific routes was gloomiest, contracting 13 per cent against volumes in 2000.
Not surprisingly, China was given the most bullish growth forecast, projected at 9.5 per cent annually for the next four years, followed by United Arab Emirates, Thailand, Malaysia and Turkey.