Airlines to lose US$9b

• IATA forecasts
• Air cargo news
• Asia Pacific carriers
• Recession watch

Malaysia - Airlines are expected to make some US$9 billion in losses this year, nearly double IATA's previous estimate of US$4.7 billion, as economic situation continues to take a bite out of bottom lines.

IATA made the revision at the AGM held in Kuala Lumpur this week, during which director general and CEO Giovanni Bisignani described the current climate as the most difficult the industry has faced.

"After September 11, revenues fell by 7%. It took three years to recover lost ground, even on the back of a strong economy. This time we face a 15% drop - a loss of revenues of US$80 billion - in the middle of a global recession."

IATA also revised its loss estimate for 2008 to US$10.4 billion from the previous estimate of US$8.5 billion.

Global air cargo demand is expected to decline by 17%, or 33.3 million tonnes of freight carried in 2009 compared to 40.1 million tonnes in 2008.

Asia Pacific carriers are likely to suffer the most, IATA said. With Japan in deep recession, China and India delivering major losses as export-driven demand slows, carriers in this region are expected to post the largest losses at US$3.3 billion, IATA said. The loss is, however, a slight improvement in performance than the US$3.9 billion that the region's carriers lost in 2008.

Bisignani said the crisis made liberalisation of airlines ever more critical. "We cannot manage in these unprecedented times with one hand tied behind our back. Airlines need the same commercial freedoms that every other industry takes for granted - access to global markets and capital."

He added that the survival of the industry depended on a reconfiguration of industry forces. "Our future depends on a drastic reshaping by partners, governments and industry. We cannot bear the cost of government micro-regulation, crazy taxation and partners abusing their monopoly power," he said.