IATA has estimated that the airlines industry will lose $5.2 billion this year. While some regions will show small profits, the negative impact, according to IATA , will be almost universal. Thus, it is estimated that in 2008, North American carriers will post losses to the tune of $5 billion; Asia-Pacific is expected to see profits shrink from $900 million in 2007 to $300 million this year and European carriers from $2.1 billion to $300 million. In the same period, Latin A merican and African carriers will suffer losses of $300 million and $700 million respectively, while the West Asian carries will experience a drop in profits by $100 million to $200 million. The estimate, however, is based on an average crude price of $113 per barrel, which comes to $140 per barrel for jet fuel. While there has been some relief in the oil price in recent months, the year-to-date average is $40 per barrel more than the average for 2007. In its outlook for 2009, IATA expects the difficult business environment to continue, with industry losses totalling about $4.1 billion and the fuel bill approximately $223 billion, accounting for an estimated 40 per cent of the operating costs.

Date : 15/09/2008

Courtesy : Businessline