Airline Forecast Paints Bleak Picture For Industry

September 15, 2009 1:08 p.m. EST

New York, NY (AHN) - The International Air Transport Association (IATA) has released a new, darker prediction for the industry. Revising its outlook downward, the IATA announced airlines will lose as much as $11 billion in 2009 after revenues will fall 15 percent, or a significant $80 billion, from last year.

It will be a rough year for airlines as passenger traffic is predicted to fall 4 percent. The cost of doing business will also rise as oil prices increase from last year. In 2008, the average cost per barrel of crude oil was $56, now the IATA says airlines are looking at $61 per barrel, which will cost the industry as much as $115 billion for fuel.

"The bottom line of this crisis - with combined 2008-9 losses at $27.8 billion - is larger than the impact of 9/11," IATA CEO and Director General Giovanni Bisignani explained in a statement. "This is not a short-term shock. $80 billion will disappear from the industry's top line. That 15% of lost revenue will take years to recover."

"Conserving cash, careful capacity management and cutting costs are the keys to survival. The global economic storm may be abating, but airlines have not yet found safe harbor. The crisis continues," Bisignani added.