Global airlines to lose $9 Billion in 2009

By siliconindia   |   Wednesday, 10 June 2009, 16:04 IST   |    1 Comments
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Global airlines to lose $9 Billion in 2009
Bangalore: International Air Transport Association (IATA) predicted the loss of $9 billion for airlines globally on account of falling demand, excess capacity and increasing fuel price, and calls for a "drastic reshaping" by governments and industry partners. Giovani Bisignani, Director General, IATA said, "The industry is not looking for a bailout. Our future depends on a drastic reshaping by partners, governments and industry. We cannot bear the cost of government micro-regulation, crazy taxation and partners abusing their monopoly power." "Airlines lost $ 10.4 billion last year and industry is expecting nearly $80 billion to wipe off the balance sheets due to a sharp fall in yield, fears of a pandemic and weak demand," Bisignani said at the organization" 65th annual general meeting held in Kualalumpur "The ground shifted and our industry was shaken. Skyrocketing oil prices dominated the first half of 2008. Global recession was the story of the second half. The landscape is harsh," Bisignani said. In the last 18 months, about 50 airlines across the world have gone under, and industry estimates warn that airline companies would need about $1 trillion for recapitalization. Advance technologies such as video-conferencing have helped corporate houses to cut down travel budgets, inflicting a heavy blow to the industry. "We face a 15 percent drop (in passenger traffic) because of the global recession. Our future depends upon drastic re-sizing and reshaping by airlines," Bisignani said. After the September 11, 2001, terror attacks on the U.S., industry revenues fell by seven percent and took three years to rebound to pre-9/11 levels. Revenues will fall from $528 billion in 2008 to $448 billion in 2009 (15 percent), IATA said. Passenger yields will dip seven percent. The industry body estimates about 1,00,000 jobs in the sector at risk. The airline industry is estimated to be carrying a debt burden of $ 170 billion. "But some of this has bought a $70 billion cash cushion that helped us avoid bankruptcies," Bisignani said.