World airlines are set to make losses of $4-billion or more over the coming year, despite continuing growth in air travel, the top industry association said on Tuesday.
Air passenger traffic grew by 7,6% in 2005, driven largely by the Middle East and in Latin America, the International Air Transport Association (IATA) said in a statement.
“Freight and passenger traffic are forecast to grow in the five to six-percent range during 2006 but the industry is projected to record another loss of over $4-billion for 2006,” said IATA director general Giovanni Bisignani.
“The industry will not see black ink until at least 2007,” he warned.
Air freight grew by 3,2%, although there were signs of stronger growth in December.
“The industry is returning to a more normal growth pattern after the shocks that began in 2001,” said Bisignani.
“Passenger traffic is lower than the 15,3% increase recorded in 2004, but above the historical growth of six percent.”
“Air freight, however is disappointingly low as a result of weaker demand from critical sectors such as IT and semi-conductors,” he added.
Industry losses reached $6-billion in 2005, in keeping with predictions by IATA in December. That compared with $4,2-billion of losses in 2004 and $7,6-billion the year before.
A steady return to profitability in the airline industry has been hampered by a surge in prices of jet fuel to record high levels until they eased slightly in the final months of the year.
European and Asian carriers made total profits of $1,3-billion and $1,5-billion respectively in 2005, but those results were offset by financially-troubled United States carriers, which lost $10-billion, IATA said. – AFP