Ethiopian Review

The International Air Transport Association is forecasting a gloomy revenue picture for the airline industry in 2009, according to an Associated Press article and an official IATA statement, both released Tuesday. The Montreal-based trade group, which represents over 230 airlines worldwide, estimates a total of $11 billion in airline industry losses for 2009.

This past June the IATA predicted airlines to lose $9 billion this year, according to the Associated Press. However, according to the most recent IATA statement, the latest revenue projection was recently revised to raise the 2009 loss prediction to $11 billion. The Associated Press reports the airline industry has lost $6 billion in the first half of 2009 alone. Additionally, IATA predicts industry revenues for the year are expected to fall by almost 15 percent, or $80 billion, to $455 billion, compared to 2008 levels, according to the official statement. On September 16th, Fox Business News reports that IATA’s projected loss of $16.8 billion in 2008 is the worst revenue loss ever recorded by the airline industry, with 2009 projected to be theIATA’s second worst year in it’s 65-year history.

The bleak report suggests the airline industry has yet to return to pre-recession levels, with the Associated Press citing weak passenger demand, falling fares, and a spike in high fuel prices as causes for the projected losses. Additionally, the Associated Press states business and first-class seating has dropped 20 percent as airlines continue to struggle filling profitable first-class seats and booking last-minute business travelers who are traditionally willing to pay more.

On September 15th, The New York Times detailed IATA’s revenue projection for North American carriers, which are expected to lose $2.6 billion this year. According to the Times article, airlines in the Asia-Pacific region and the Middle East are already beginning to see a faster and stronger revenue rebound.

In the Associated Press report, Giovanni Bisignani, the association’s CEO and director general, claims airlines have lost more money in the 2008-2009 recession than they lost in 2001-2002 after the September 11th attack. During a news conference in Washington D.C., Bisignani stated it took more than three years for airline revenues to recover after 9/11, the Associated Press reports. According to the IATA’s official report, the losses will continue into 2010 with the industry expected to report a total of $3.8 billion in losses. Bisignani does not foresee revenue returning to 2008 levels until 2011 at the earliest, according to the Associated Press.

Bisignani’s is quoted in the official statement, saying, “The global economic storm may be abating, but airlines have not yet found safe harbor. The crises continues.” Bisignani also called the drop “shocking” at the Washington D.C. news conference, according to a September 15th Bloomberg article. In IATA’s official statement, Bisignani states the industry isn’t seeking government bailouts, but warns, “Governments need a wake-up call to create a policy framework that supports a competitive air transport sector capable of driving economic expansion.” The Associated Press further reports Bisignani called on airports to cut fees, praising a cost reduction for airlines to operate in Singapore and Malaysia, yet cautioned that New York’s John F. Kennedy and Newark Liberty airports “could soon become the most expensive airports in the world.”

- By Brandon Wenerd | AOL