GENEVA, Sept. 3 (Xinhua) -- The global airline industry is expected to pose losses of 5.2 billion U.S. dollars in 2008 due to high oil prices and falling demand, the International Air Transport Association (IATA) said on Wednesday.
"The situation remains bleak. The toxic combination of high oil prices and falling demand continues to poison the industry's profitability," IATA Director-General and CEO Giovanni Bisignani said in a statement.
The forecast is based on an average crude oil price of 113 U.S. dollars per barrel (140 U.S. dollars for jet fuel).
"While there has been some relief in the oil price in recent months, the year-to-date average is 113 U.S. dollars per barrel. That's 40 U.S. dollars per barrel more than the 73 U.S. dollars per barrel average for 2007," said Bisignani.
IATA on Wednesday also announced industry traffic data for July which showed a continued slowing of demand.
July year-on-year passenger demand growth fell to 1.9 percent --the lowest in five years.
Cargo demand in July contracted by 1.9 percent compared to 2007.Asia-Pacific carriers -- the largest players in the cargo market --were hit hard with a 6.5 percent drop in demand.
"While some regions will show small profits, the negative impact of the industry crisis is universal," said Bisignani.
North American carriers are expected to post losses of five billion U.S. dollars in 2008 making them the hardest hit by this industry crisis.
Asia Pacific is expected to see profits shrink from 900 million U.S. dollars in 2007 to 300 million U.S. dollars this year.
European profits will tumble seven-fold from 2.1 billion U.S. dollars in 2007 to 300 million U.S. dollars in 2008.
IATA said the difficult business environment is expected to continue in 2009.
Most economies are expected to deliver even weaker economic growth next year, which will negatively impact air travel and freight.
With an expected oil price of 110 U.S. dollars per barrel and continued weak growth, industry losses are expected to continue at 4.1 billion U.S. dollars.
