IATA’s forecast “bleak,” with the worst to come

The global aviation industry is facing its harshest environment in half a century with industry losses expected to reach US$2.5 billion in 2009, according to the latest figures from the International Air Transport Association (IATA).

“The outlook is bleak. The chronic industry crisis will continue into 2009 with US$2.5 billion in losses. We face the worst revenue environment in 50 years,” said Giovanni Bisignani, IATA’s Director General and CEO.

He held out praise for both carrier and IATA efforts, since 2001, to restructure the industry and individual carriers’ businesses which resulted in significant cost savings. “But the ferocity of the economic crisis has overshadowed these gains and airlines are struggling to match capacity with the expected 3 per cent drop in passenger demand for 2009.

“The industry remains sick. And it will take changes beyond the control of airlines to navigate back into profitable territory,” said Bisignani.

Outlining his industry action plan for 2009 he said: “Labour must understand that jobs will disappear when costs don’t come down. Industry partners must contribute to efficiency gains.

“And governments must stop crazy taxation, fix the infrastructure, give airlines normal commercial freedoms and effectively regulate monopoly suppliers,” said Bisignani.

He added that the current crisis could be a catalyst for change. Repeating his oft made remark that the “flag on the aircraft tail is killing the industry,” the IATA chief added: “It’s time to move beyond politics and government agreements to brands and business.”