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This year’s loss for the world’s airline industry will total $5 billion as it faces the worst crisis in 60 years, according to the International Air Transport Association (IATA).
The group reported on Tuesday that it had almost doubled its loss forecast to $4.7 billion from $2.5 billion in December.
Giovanni Bisignani, the group’s CEO, predicts revenue will fall $62 billion in 2009, which is double its contraction after September 11, 2001. “This crisis is resizing and reshaping the industry,” he said.
This is due to the sharp declines in the areas from which airlines collect the most revenue: first- and business-class passenger traffic. This high-end passenger traffic dropped 16.7 percent in January.
“Over the past 15 months we suspended nearly 40 airlines. The reason? They couldn’t pay their bills,” Bisignani said.
In addition, airlines are having trouble obtaining loans from banks to help them purchase new aircrafts. The group predicts that the world’s airline fleets would absorb only 700 jets from Boeing and Airbus by 2011. This number is down from the 1,400 expected for delivery just in this year.