MUMBAI: There seems to be no silver lining in sight for the global aviation industryas the International Air Transport Association, or IATA, says the global airline industry will post losses of 5.2 billion in 2008 and 26 airlines have already gone bankrupt
The going continues to be tough for airlines as IATA revised its outlook for the global aviation industry in 2008, saying based on an average crude oil price of $113 a barrel.
IATA had said in June that losses for the industry would range between
$2.3-6.1 billion, based on an average oil price of $122.
For July, the year-on-year passenger growth fell to 1.9%, the lowest in five years, although the big surprise of the report was that July saw a 0.5% drop in passenger demand by Asia-Pacific carriers. This clearly shows that economic weakness is spreading to previously robust economies.
According to the data North American carriers are expected to post losses of
$5 billion in 2008 making them the hardest hit. Following it European profits will tumble seven-fold from $2.1 billion in 2007 to $300 million in 2008.
Also, Asia-Pacific is expected to see profits shrink from $900 million in
2007 to $300 million this year. Middle Eastern profits will drop by $100 million to $200 million and the Latin American and African carriers will see losses deepen to $300 million and $700 million, respectively.
As a result of the weaker economic outlook, IATA also revised its traffic forecast for domestic and international markets.
It said passenger traffic is now expected to grow by 3.2%, which is only half the pace of expansion seen in 2007. The report also added that more airlines have gone bust in 2008 than in the aftermath of Sept 9/11 and calls for a strong dose of liberalisation as a cure.
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