Airline Industry – “Worst Revenue Environment in 50 Years”
Pretty grim outlook for the state of airline transportation according to a recent press release from IATA. In the report, IATA is forecasting an industry loss of $2.5 billion in 2009. All global regions with the exception of the U.S. market are expected to have larger losses in 2009 than in 2008.
Via IATA’s website:
Forecast highlights are:
* Industry revenues are expected to decline to US$501 billion. This a fall of US$35 billion from the US$536 billion in revenues forecasted for 2008. This drop in revenues is the first since the two consecutive years of decline in 2001 and 2002.
* Yields will decline by 3.0% (5.3% when adjusted for exchange rates and inflation).
* Passenger traffic is expected to decline by 3% following growth of 2% in 2008. This is the first decline in passenger traffic since the 2.7% drop in 2001.
* Cargo traffic is expected to decline by 5%, following a drop of 1.5% in 2008. Prior to 2008 the last time that cargo declined was in 2001 when a 6% drop was recorded.
* The 2009 oil price is expected to average US$60 per barrel (Brent) for a total bill of US$142 billion. This is US$32 billion lower than in 2008 when oil averaged US$100 per barrel (Brent).
Emphasis ours.
Giovanni Bisignani, IATA’s Director General and CEO, had this to say specifically regarding global air cargo:
Bisignani made special note of the continuing contraction of air cargo traffic that started in June 2008. “Air cargo comprises 35% of value of goods traded internationally. The 7.9% decline in October is a clear indication that the worst is yet to come – for airlines and the slowing global economy,” said Bisignani.
Bisignani also said, “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.”
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