The International Air Transport Association predicts airlines worldwide will lose $4.7 billion in 2009 as dropping traffic offsets a deep drop in fuel prices.
Worldwide industry revenue is expected to fall by 12%, to $467 billion, the association said. Revenue has plunged on flights across the Atlantic and the Pacific as more corporate travelers fly coach — or stay home.
Giovanni Bisignani, the association’s director general and chief executive said, ‘The industry is in intensive care. Airlines face two immediate fundamental challenges: conserving cash and carefully matching capacity to demand.’
The Chicago Tribune said U.S. carriers, sent into crisis mode when fuel costs hit the stratosphere last year, may be better poised to ride out the situation. They began to raise cash last summer before financing became difficult and began to cut unprofitable routes last fall to help stem losses.
Capacity in the U.S. domestic market is down 9% year over year, roughly equivalent to grounding a major airline.
Airlines around the globe have trimmed their flying by about 4%.
The air transport association expects U.S. carriers to deliver the best performance in the world this year, earning a $100 million profit. Asian carriers should fare worst, losing $1.7 billion as once rapidly growing aviation markets in China contract.