IATA has widened its 2005 loss forecast for the airline industry and is predicting red ink of $6 billion – nearly 10% more than previously anticipated.
Director general Giovanni Bisignani revealed the new loss forecast at the 61st IATA annual general meeting in Tokyo. In April the association predicted losses of $5.5 billion this year, largely as a result of rising fuel prices.
"My concern is the bottom line," he said. "Losses between 2001 and 2004 exceeded $36 billion. And we will lose a further $6 billion in 2005. Parts of the industry are profitable. But these margins are not acceptable for a $400 billion industry. Urgent action and change are needed."
High fuel prices are "destroying our profitability", Bisignani said. The total fuel bill for IATA member airlines is now expected to reach $83 billion this year – much more than the $76 billion predicted recently.
"The crisis in our industry continues," he said. "We cannot continue with airlines flying and everybody else making the money. This must change."
Bisignani used his state-of-the-industry speech to repeat calls for major structural change, including efficiency gains by airlines and monopoly service suppliers such as airports and air traffic control organisations, and easing bilateral air services restrictions.
He also repeated calls for governments to "stop micro-managing the industry" through "bad consumer regulation", as well as to ease taxes and "stop treating us like cash cows".
"Development is a serious issue that needs a serious solution," he said. "But taxing airline travellers is about the dumbest way possible to achieve it. Why? Because no industry has done more for development than air transport by linking nations and facilitating tourism."
Source: Flight International
