By Christopher Hinton
NEW YORK (Dow Jones) -- The International Air Transport
Association significantly expanded its industry-loss forecast
Tuesday, reflecting expectations for a heavy slump in travel for
the Asia Pacific, Europe and Latin America regions.
For 2009, the Montreal-based IATA said it now expects an
aggregate industry loss of $4.7 billion, compared to $2.5 billion
in red ink that it forecast in December.
"The state of the airline industry today is grim," said Giovanni
Bisignani, head of the trade group. "Demand has deteriorated much
more rapidly with the economic slowdown than could have been
anticipated even a few months ago."
IATA represents some 230 airlines that account for 93% of
scheduled international air traffic.
Hardest hit will be the Asia-Pacific region, where carriers are
expected to post losses of $1.7 billion, compared to IATA's earlier
forecast of $1.1 billion for 2009. Demand for travel to and from
China is expected to contract between 5% and 10%, while the
region's largest market, Japan, will likely see its gross domestic
product shrink by 5.5%, under the revised forecast.
European carriers are expected to post a $1 billion loss for the
year with a 2.9% drop in the region's GDP, the group said. Latin
America's GDP is forecast to grow, but a collapse in the demand for
commodity products will likely lead to 7.8% decline in air
traffic.
For its part, North America is expected to deliver the best
regional performance, with 2009 profit pegged at $100 million, as
the industry offsets a steep falloff in demand with seat-capacity
cuts, IATA said.
Overall, industry revenues are now expected to fall by 12% to
$467 billion in 2009, exaggerated by even greater weakness in
premium traffic than previously forecast, while passenger traffic
as a whole will likely decline 5.7%, the group said.
Among the major domestic carriers, Delta Air Lines (DAL) and
United Airlines parent company UAL Corp. have announced sharp
reductions in their international capacity as air-traffic demand
has declined, with smaller cuts for Continental Airlines (CAL) and
AMR Corp. (AMR), the parent of American Airlines.
In Europe, Deutsche Lufthansa , Aer Lingus and Air France-KLM
have warned of a tough 2009. .