IATA sees positive signs as aviation's horror decade ends

International Air Transport Association (IATA) yesterday revised its earlier forecast of a US$3.8bn loss in 2010.

IATA said airlines had collectively lost US$11bn in 2009, ending a decade during which the industry had lost more than US$49bn.

The peak aviation body re-emphasised its call for consolidation of the industry to avoid further losses.

Next year's forecast remains grim, though the Asia-Pacific's predicted US$700m loss is a huge improvement on the $3.4bn loss expected this year.

IATA said the Asia-Pacific was showing "the most dramatic improvement", driven by economic recoveries in countries such as China, where gross domestic product is tipped to grow by 9% next year.

After a 13% fall this year, global demand for aircargo was expected to grow by 7% to 37.7m tonnes next year, an improvement on the previous forecast of 5%.

"Total freight volumes will remain 10% below the 41.8m tonne peak recorded in 2007," IATA said.

"Cargo demand is rising faster than world trade as depleted inventories are rebuilt.

"Once the inventory cycle completes, growth is expected to fall back in line with world trade."

IATA chief and director general Giovanni Bisignani described the past year as "Annus Horribilis", ending 10 "challenging years of an aviation Decennis Horribilis".

"The worst is likely behind us," Mr Bisignani said.

"For 2010, some key statistics are moving in the right direction.

"Demand will likely continue to improve and airlines are expected to drive down non-fuel unit costs by 1.3%.

"But fuel costs are rising and yields are a continuing disaster.

"Airlines will remain firmly in the red in 2010 with US$5.6 billion in losses."

Mr Bisignani called for a change to the aviation industry's structure.

"There will be some individual airline success stories [but] without relaying the foundations of the industry to facilitate structural change, covering the cost of capital for this hyper-fragmented industry will remain a dream at best," he said.

“Consolidation is the great hope for the industry.

"The round of consolidation experienced since this horrible decade began is a step in the right direction.

"But it has been confined within political borders as a result of ownership restrictions in the archaic bilateral system.

"The industry cannot afford the mounting losses of the status quo.

"The next decade must facilitate consolidation."