IATA REVISES UPWARDS INDUSTRY’S NET LOSS TO US$5.6 BIL IN 2010

From M.Saraswathi

GENEVA, Dec 15 (Bernama) – The International Air Transport Association
(IATA) has revised its financial outlook for 2010, to an expected US$5.6 billion
global net loss, amid rising fuel costs and declining yields.

This figure is larger than the previously forecast loss of US$3.8 billion.

The IATA has maintained its forecast of a US$11 billion net loss for 2009.

"The world’s airlines will lose US$11 billion in 2009.Between 2000 and 2009,
airlines lost US$49.1 billion, which is an average of US$5 billion annually,"
said IATA’s director general and chief executive officer, Giovanni Bisignani at
the IATA Global Media Day here, Tuesday.

"The worst is likely behind us," he added.

According to Bisignani,demand will likely continue to improve and
airlines are expected to drive down non-fuel units costs by 1.3 per cent.

"But fuel cost is rising and yields are a continuing disaster. Airlines will
remain firmly in the red in 2010 with US$5.6 billion in losses," he said.

He said industry revenue is expected to rise by US$22 billion (4.9 percent)
to US$478 billion in 2010, compared with 2009.

However, revenue remains at US$57 billion (-11 percent) below the peak of
US$535 billion in 2008 and US$30 billion below that of 2007, when passenger
traffic was at similar levels to what is expected in 2010.

Following a decline of 4.1 percent in 2009, passenger traffic is
expected to grow by 4.5 percent in 2010, which is stronger than the previously
forecast 3.2 percent in September.

A total of 2.28 billion people are expected to fly in 2010, bringing the
total passenger numbers, back in line with the peak recorded in 2007.

As for cargo demand, he said it is expected to grow by seven percent to 37.7
million tonnes in 2010.This is also stronger than the previous forecast of
five percent in September, following a 13 percent decline in 2009.

Total freight volumes will remain 10 percent below the 41.8 million tonnes
peak recorded in 2007.

Cargo demand is rising faster than world trade as depleted inventories are
rebuilt.

Once the inventory cycle is completed, growth is expected to fall back in
line with the world trade.

In 2009, passenger and cargo yields plummeted by 12 percent and 15 percent
respectively.

Cargo yields are expected to improve from their extraordinary low level.
This is being driven by two factors, namely, excess capacity in the market and
reduced corporate travel budgets.

Capacity adjustments in 2009 were made at the expense of lower aircraft
utilisation.

An additional 1,300 aircraft due to be delivered in 2010 will contribute to
2.8 per cent of global capacity growth, putting continuity on yields.

On top of this, corporate travel buyers have adjusted their budgets to
reflect lower premium fare levels.

-- BERNAMA