Airline Industry to Suffer $5.2 Billion Loss in 2008, IATA Says

[marmar]

from Bloomberg:



Airline Industry to Suffer $5.2 Billion Loss in 2008, IATA Says

By Andrea Rothman

Sept. 3 (Bloomberg) -- Airlines may report combined losses of about $5.2 billion this year, almost $3 billion higher than forecast in June, as economies slow and fuel costs erode earnings, the International Air Transport Association said.

The net loss will fall short of the $6.1 billion worst- case-scenario the industry body envisaged in the last forecast because of the recent drop in oil prices, it said today in an e-mailed statement. Traffic growth will be lower than predicted as an economic slowdown spreads, it said.

IATA lifted the annual loss estimate for a fifth time in 12 months after passenger growth slumped to a five-year low in June and the number of carriers grounding planes or going bankrupt this year passed two dozen. Airlines had a profit of $5.6 billion in 2007, the first since the 2001 attacks on the U.S. The industry has lost more than $36 billion since 2001.

``Profitability deteriorated dramatically in the first half of 2008,'' IATA said in the statement. ``A new development has been weaker economic growth outside the U.S., reflected in a deterioration in the outlook for air travel and freight.''

The group, whose members account for 93 percent of international air traffic, based its loss estimate on an average oil price this year of $113 dollar a barrel, it said. Crude recently traded at $108.25 in New York. ......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=ag9wcbhKTacI&refer=home