Airlines set to lose 3 billion pounds in 2008
Global airlines are set to post losses of $5.2 billion (3 billion pounds) this year and $4.1 billion in 2009 as high oil prices take a toll on the industry, the International Air Transport Association (IATA) said on Wednesday.
M&B caps loss for failed property deal"The difficult business environment is expected to continue," IATA Director General Giovanni Bisignani told a conference call. "The situation remains bleak."
Geneva-based IATA, which represents 230 airlines worldwide, estimated in June that losses would be between $2.3 billion and $6.1 billion in 2008, depending on the price of oil.
IATA's latest forecasts are based on an average crude oil price of $113 per barrel in 2008 and $110 in 2009. U.S. crude traded around $108 per barrel on Wednesday.
In 2007 the global airline industry made profits of some $5.6 billion, but it has since been pummelled by soaring energy prices and an economic downturn that began in the United States.
North American airlines are likely to be hit hardest in the next two years, which Bisignani said would be tough for an industry whose fortunes are closely tied to economic swings.
Many carriers have already raised ticket prices, imposed fuel surcharges and cut flight capacity. Several have sought mergers and partnerships to save costs.
Bisignani said governments should not stand in the way of airline consolidation. "In this difficult moment, everything must be done to facilitate those types of processes," he told the telephone briefing.
WEAK RESULTS
Air France-KLM, Iberia, Cathay Pacific and Singapore Airlines are among those who have posted weak results in past months, while British Airways said the economic slowdown and soaring fuel costs had created the worst trading conditions it had endured.
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