The airline industry association, IATA, today sharply increased its loss forecast for carriers to $4.7 billion this year due to a 'rapid deterioration of the global economic conditions.'
The new forecast from the International Air Transport Association is a sharp rise from the $2.5 billion in losses predicted by IATA in December.
The industry group also raised its estimate of total airline losses for 2008 from $8 billion to $8.5 billion, blaming a 'very sharp fall in premium travel and cargo travel.'
'The state of the airline industry today is grim,' said Giovanni Bisignani, IATA's director general.
'Demand has deteriorated much more rapidly with the economic slowdown than could have been anticipated even a few months ago. There is little to indicate an early end to the downturn,' he added, predicting a 'grim 2009'.
Although the airline industry's prospects may improve towards the end of the year, 'expecting a significant recovery in 2010 would require more optimism than realism,' Bisignani warned.
Demand is expected to continue to slide, with passenger traffic shrinking by 5.7% over the year.
Asian-Pacific carriers are expected to post the biggest losses this year of $1.7 billion as demand tumbles 6.8%. European carriers are forecast to post $1 billion in losses while Middle east carriers are seen losing $900m.
Only North American carriers would post a profit of $100m, as they benefit from sound capacity management and lower fuel prices, according to IATA.
