Mark Pilling / Paris
IATA has increased its forecast for industry losses this year to $3 billion from $2.2 billion but sharply reduced last year’s loss estimate.
“We are starting to see some light at the end of a six-year tunnel - some cautious optimism,” said Giovanni Bisignani, IATA director general, speaking at the association’s annual general meeting in Paris today.
“While the fuel price continues to race ahead of efficiency gains, it is truly amazing that profitability has not deteriorated from last year. Losses for 2006 will be $3 billion, slightly less than the $3.2 billion recorded for last year,” says Bisignani.
IATA originally estimated a $6 billion industry loss for 2005 but says it reduced this in large part because of the way ICAO accounted for United Airlines’ losses during the year.
Bisignani warns that a weaker global economy could change the financial picture dramatically. He says: “We must remember that the strong revenue environment - 10% annual growth over the last three years - is also fragile.”
The price of oil remains the “wild card”, he says. “Prices are racing ahead of efficiency gains and robbing our profitability. The industry fuel bill will top $112 billion this year - $21 billion more than 2005.”