The International Air Transport Association (IATA) said airlines could report a collective loss of $2.3 billion this year as spiraling fuel costs and a slowing economy wipe out earnings. The airline industry's main trade group said the new outlook is based on oil at $107 a barrel, today at its annual meeting in Istanbul. With crude at $135, losses may widen to $6.1 billion.
IATA, which forecast a $4.5 billion profit for the industry as recently as April 1, slashed estimates for the fourth time in nine months. A 42% jump in oil prices in six months has combined with a slowdown in demand following the tightening of global credit to create a 'perfect storm' for the industry, which had a profit of $5.6 billion in 2007, the first since the 2001 terror attacks.
IATA Chief Executive Officer Giovanni Bisignani said: 'Just as we start to recover we face another crisis of potentially even greater dimension. Skyrocketing oil prices are changing everything. The situation is desperate and potentially more destructive than our recent battles with all the horsemen of the apocalypse combined.' |
