IATA issues rare bit of good news for the sector

The airline industry’s leading trade body, the International Air Transport Association (IATA), has said carriers are recovering from the recession quicker than expected.

IATA director general Giovanni Bisignani gave the upbeat assessment yesterday, halving this year’s forecast of expected losses in the sector to $2.8 billion (£1.8 billion).

Though still worryingly high, the predicted shortfall marks a dramatic improvement on the $9.4 billion estimated to have been lost by the airline industry throughout 2009.

Mr Bisignani said measures geared at boosting efficiency which were taken by global airlines in the wake of the financial crisis had succeeded in dampening losses.

But he credited Asian carriers with driving the lion’s share of the recovery, while warning that European and US airlines continue to lag behind and must step up efforts to reform.

“We are seeing a definite two-speed industry,” the IATA chief explained. “We are moving in the right direction. The recovery is strong. But we are still far from pre-crisis levels.”

Asian Pacific airlines are expected to make profits of $900 million this year, he predicted, while European airlines will lose $2.2 billion and their North American counterparts will sink $1.8 billion into the red in 2010. Mr Bisignani added that passenger traffic will grow at half the pace of cargo.

The IATA has described 2009 as the worst year for the airline industry since World War II, with the once-lucrative premium sector being worst hit by falling consumer spending power.

© Cheapflights Ltd (Creative Commons image: huldero / Flickr)

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