Global air travel industry may lose $6 billion in 2005
03.10.2011, 01:02
The $400 billion global airline industry, reeling since the September 11, 2001 attacks in the United States, aims to cut non-fuel unit costs by 4.5 per cent through rationalisation.
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The global airline industry will likely chalk up losses of $6 billion this year, up from $4.8 billion in 2004, as a result of sky-high fuel costs, the International Air Transport Association (IATA) said on Monday.
The loss estimate, based on an average oil price of $47 a barrel, was raised from last month’s forecast of $5.5 billion.
“The crisis in our industry continues ... the fuel bill (this year) of $83 billion is destroying our profitability,” IATA Director General Giovanni Bisignani told a news conference in Tokyo, complaining that governments had “no vision, no leadership and no actions on important issues” facing the industry.
“European plans to raise $7.8 billion for development assistance by taxing air transport is about the dumbest possible way to help the developing world,” Bisignani said.
Cutting European farm subsidies by only 12 per cent would generate $7.8 billion, he said. IATA, which coordinates aviation rules and standards, called on governments to cut taxes on airlines, push deregulation, and appoint an independent regulator to ensure that airport service companies boosted efficiency.
It was “political nonsense” that Europe had a single currency, but 35 air traffic control organisations, Bisignani said.
The $400 billion global airline industry, reeling since the Sept. 11, 2001 attacks in the United States, aims to cut non-fuel unit costs by 4.5 per cent through rationalisation, route improvements and other measures this year.
World passenger traffic grew 8.7 per cent in the first four months of 2005 but the growth has not translated into profitability due to skyrocketing fuel costs and other inefficiencies, the IATA director general said. Benchmark US light crude prices reached a record high of close to $60 a barrel just last month. They have slipped since then but popped back above $50 on Monday.
Naresh Goyal, chairman of India’s largest domestic carrier, said double-digit growth would continue as more international routes come on line.