The International Air Transport Association (IATA) warns that the airlines industry could post a wider than expected loss this year due to the global economic crisis.
Director-general and chief executive officer Giovanni Bisignani says the industry will slip deeper in the red this year, The Star of Malaysia reports today.
He says airline losses will be “substantially worse” than the estimated US$4.7 billion forecast in March for 2009.
“The number we`re giving on Monday will not be better despite signs of improvement in cargo.
“Cargo has stabilised with a contraction of 21% compared with a contraction of 22% previously. This showed that it has probably touched the bottom,” he told a media briefing ahead of the IATA AGM and the World Transport Summit that starts Sunday.
The event is expected to be attended by more than 500 industry leaders who will discuss and debate prospects and strategies to ensure the industry emerges stronger with a focus on safety, security, environment, technology and liberalisation.
Bisignani said cargo was very important as it was one of the indicators of how the economy was going.
He added that the total freight airlines handled represented 37% of total freight globally in terms of value.
Last week, the IATA released the international traffic data for April, which showed a 3.1% decline in passenger demand and a 21.7% fall in cargo demand compared with a year ago.
The average passenger load factor stood at 74.4% against 72.1% in March.
Although airline stocks have gone up about 8% in May as markets anticipated an economic recovery ahead, losses were worsening in the first quarter of 2009 with 50 airlines reporting US$3.3bil in total net losses.
“The Sept 11 terrorist attack was a shock and the aviation industry lost 7% in revenue which took three years to recover.
“The current crisis is worse and will take more than three years to recover,” Bisignani said.
He said the AGM will also address the climate change issue.
“We (airlines) represent 2% of the carbon dioxide emission but we will take it seriously. We expect our emission this year to fall by 7% with less travelling and implementation of effective measures,” he said.
He says the meeting will also send a clear signal to governments for stronger cooperation as “too often governments do not understand aviation”.
“We`re not asking for a bail-out, just the freedom to run the industry as a business,” he added.