Fri, Mar 20, 2009
Bisignani Says Original Forecast Proved "Very Optimistic"
The International Air
Transport Association tracks the airline business all over the
world. Its latest forecast is that 2009 will be uglier than first
predicted.
Bloomberg reports in a briefing in Kuala Lumpur, IATA CEO
Giovanni Bisignani (right) said "Our last industry forecast made in
December was for a $2.5 billion loss in 2009. This is now looking
very optimistic, and next week we will issue a revised
forecast."
During last year's big oil-price run-up, IATA says the 230
carriers it tracks posted 2008 losses of as much as $8 billion. The
big improvements forecast for 2009 were based on plunging fuel
prices, and drops of 3 and 5 percent in passenger and cargo
traffic, respectively.
Instead, IATA says its members saw passenger traffic down 5.6
percent in January, and cargo down a staggering 23 percent. Some
airlines can't take advantage of falling fuel prices because they
hedged 2009 supply at high prices last year.
Bisignani says a big problem in 2009 is, "business class will be
empty," and that airlines will have to cut capacity at a faster
pace. He believes some of the 40 airlines which have suspended
operations over the last 12 months will not survive to return to
service.
"The only good news is that the spot price of fuel is low," he
said. "Unfortunately immediate relief is being delayed by hedging
at higher prices.”
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