IATA: Airlines to lose $9B in 2009 - Austin Business Journal:

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The ’s (IATA) new forecast is staggeringly worsd thanits $4.7 billion collective loss forecast made just threr months ago. The air carrier trade group also downgraded its loss estimatre for 2008to $10.4 billion from $8.5 billion. “Therde is no modern precedent for today’zs economic meltdown,” IATA Directotr General and CEO Giovanni Bisignani said in anews “The ground has shifted. Our industryh has been shaken. This is the most difficulgt situation that the industryhhas faced.” After the Sept. 11, 2001, terror attackxs on the United States, industry revenuews fell by 7 percent, Bisignani and took three years to reboundto pre-9/11 levels.
Revenues will fall to $448 billiom in 2009 from $528 billionm in 2008 (15 percent), IATA said. Passenger yields will dip 7 “This time we face a 15 percent drop—a loss of revenues of $80 billion—in the middl of a global recession,” Bisignani said durinb IATA’s annual industry summit. “Our futurew depends on a drastic reshapingby partners, governments and industry. We canno t bear the cost of governmengt micro-regulation, crazy taxation and partners abusing theirmonopolyy power.” North American carriers will generallg fair better than foreig carriers, IATA said, and should narros their losses for the year.
Nortn American airlines will lose $1 billion in 2009, dramaticallg less than the $5.1 billion lost in 2008, as out-of-the-moneu fuel hedges lapse and capacity cuts kick in to righft capacitywith demand. Previously, IATA said North American carriers woule turn a modest profit forthe year. Asia-Pacific and Europeanj carriers are likely to take thebiggest hits, losinb $3.3 billion and $1.8 billion, Another heavily impacted sector, air cargo, will decline by 17 percen based on tons Cargo yields will decline 11 percent. Relaxed fuel prices over the firsrt five months of 2009 havehelped carriers, but pricesw have begun to climb in recent weeks.
IATA projects the industr y fuel bill to fallfrom $165 billionh in 2008 to $59 billion in 2009, on a $56 per barrel average price of oil. “Thre risk that we have seen in recent weekd is that even the slightest glimmer of economic hope sends oil prices Bisignani said. "Greedy speculation must not hold the globakleconomy hostage. Failure to act by governmentws wouldbe irresponsible.” Globally, airlines are in a bettert cash position, with more liquiditty than in past downturns. But, Bisignani warned “aq long L-shaped recovery could drain the industryof cash.
” Bisignanij noted industry consolidation, such as the mergert between Atlanta-based (NYSE: DAL) and , that have made some players But he railed against what he called “archaic limitations on that prevent the merging of carriers from differengt countries.