Sector expects disastrous results in 2009 - IATA says its “worst revenue situation in 50 years”. - The International Air Transport Association (IATA), which represents 230 airlines comprising 93% of scheduled international air traffic, has published its economic forecasts for 2009, which included significant losses. All regions, except the US, are expected to report an industry loss of US$2.5 billion, a larger figure in 2009 than in 2008. The IATA affirms that the ferocity of the crisis requires changes that cannot be controlled by the industry alone. It is calling on governments to stop crazy taxation, fix the infrastructure, give airlines normal commercial freedoms and effectively regulate monopoly suppliers. The major points contained in the forecasts are: 1) industry revenues are expected to decline to US$501 billion. This a fall of US$35 billion from the US$536 billion in revenues forecasted for 2008. This drop in revenues is the first since the two consecutive years of decline in 2001 and 2002; 2) yields will decline by 3.0% (5.3% when adjusted for exchange rates and inflation); 3) passenger traffic is expected to decline by 3% following growth of 2% in 2008. This is the first decline in passenger traffic since the 2.7% drop in 2001; 4) cargo traffic is expected to decline by 5%, following a drop of 1.5% in 2008. Prior to 2008 the last time that cargo declined was in 2001 when a 6% drop was recorded; the 2009 oil price is expected to average US$60 per barrel (Brent) for a total bill of US$142 billion. This is US$32 billion lower than in 2008 when oil averaged US$100 per barrel (Brent). The outlook is bleak. The chronic industry crisis will continue into 2009 with US$2.5 billion in losses. “We face the worst revenue environment in 50 years”, said Giovanni Bisignani, IATA's Director General and CEO. IATA also updated its forecast for 2008 to a loss of US$5.0 billion. This is slightly improved from the US$5.2 billion loss projected in the Association's September forecast primarily as a result of the rapid decline in fuel prices. The reduction in industry losses from 2008 to 2009 is primarily due to a shift in the results of North American carriers. As a result, North American carriers are expected to post a small profit of US$300 million in 2009. “North America will be the only region in the black, but the expected US$300 million profit is less than 1% of their revenue. 2009 will be another tough year for everyone,” said Bisignani. All the other regions will show losses: 1) Asia-Pacific carriers will see losses more than double from the US$500 million in 2008 to US$1.1 billion in 2009. With 45% of the global cargo market, the region's carriers will be disproportionately impacted by the expected 5% drop in global cargo markets next year. The region's largest market - Japan - is already in recession. And its two main growth markets - China and India - are expected to deliver a major shift in performance; 2); losses for European carriers will increase ten-fold to US$1 billion. Europe's main economies are already in recession. Hedging has locked in high fuel prices for many of the region's carriers in US dollar terms, and the weakened Euro is exaggerating the impact; 3) Middle Eastern airlines will see losses double to US$200 million. The challenge for the region will be to match capacity to demand as fleets expand and traffic slows - particularly for long-haul connections; 4) Latin American carriers will see losses double to US$200 million. Strong commodity demand that has driven the region's growth has been severely curtailed in the current economic crisis. The downturn in the US economy is hitting the region hard; 5) African airlines will see losses of US$300 million continue. The 7.9% decline in October is a clear indication that the worst is yet to come - for airlines and the slowing global economy,” said Bisignani. The only positive note is the impact of the crisis on the environment: efforts made by the airlines since 2001 towards their fuel campaign helped airlines to save US$5 billion, equal to 14.8 million tonnes of CO2. (I.L./trans/rh)