IATA: Airline loss forecast doubles since March
The International Air Transport Association is forecasting a 17 percent drop in air freight volume for 2009 and its prediction for industry-wide losses has nearly doubled since its March forecast, to $9 billion.
'Airline losses have already been worse than expected in the first quarter,' IATA said in its monthly economic outlook. 'Oil prices have also started to rise, as markets anticipate economic recovery. As a result we now forecast industry net losses remaining high at $9 billion during 2009, which is twice as big as the $4.7 billion loss we were forecasting in March.'
The association said that while the air freight market seemed to hit bottom in late 2008, volumes are on a sideways or downhill trajectory.
'Air freight volumes were down 24 percent on international markets and 20 percent overall in the first quarter,' IATA said. 'The improvement in business confidence will help lift air freight, but the inventory overhang will limit that to an average decline in 2009 of 17 percent.'
However, IATA said economic signs provide hope for the end of 2009.
'Air freight volumes have always been a timely indicator of economic turning points and a low point was reached for international (freight ton-kilometers) in December, since when volumes have moved sideways,' IATA said. 'Business confidence surveys point to a modest rise in air freight during the next few months.'
The current situation is not good for airlines, however, with Asian and European airlines hardest hit.
'With 50 airlines having reported first quarter results at the time of writing it is clear that the deterioration in financial performance early this year was worse than expected,' IATA said. 'Airlines in Europe and Asia Pacific have suffered disproportionately.'