World’s airlines set to lose $9 billion
Sunday, 08 Jun, 2009
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The world’s airline will lose $9 billion this year on top of $10.4 billion lost in 2008, IATA has warned.
The airline body’s director general and CEO Giovanni Bisignani cautioned that a return of rising fuel prices was putting recovery from global recession at risk.
“Greedy speculation must not hold the global economy hostage,” he said. “Failure to act by governments would be irresponsible.
“On top of this, an even bigger negative number is on the horizon: $80 billion. That is the total revenue that will disappear with falling demand, collapsing yields, broken consumer confidence, and pandemic fears.
“The landscape is harsh. Airlines will lose $9 billion this year,” he told IATA’s annual meeting in Kuala Lumpar.
He described the airline industry as being in “survival mode”.
“This may be the bottom but recovery is different. Banks are still not able to finance business. $1 trillion is still needed to re-capitalize.
“Our customers don’t have confidence. They need to reduce debt and that means less cash to spend.
“Business habits are changing and corporate travel budgets have been slashed. Video conferencing is now a stronger competitor.”
Bisignani added: “Optimists see growth by the end of the year but pessimists view this as a mirage and expect an L-shaped recovery. I am a realist. I don’t see facts to support optimism.
“Our industry is in survival mode. Whether this crisis is long or short, the world is changing.
“Even if we try to look beyond the crisis we must recognise that it will not be business as usual. Change is critical.
“We must use this crisis as an opportunity for governments, partners and airlines to build a stronger industry.”
For 60,000 IATA travel agents, he said "the clock cannot be turned back".
Bisignani said: "Travel is more accessible than ever in price and purchase options. To survive in the global online market, you need to reshape your services and your business models to provide greater value that travellers are willing to pay for."
by Phil Davies
Phil Davies
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