IATA anticipates 11 billion loss

Despite businesses picking up worldwide in the third quarter, the International Airline Transport Association (IATA) believes that the airline industry this year will write a loss of at least 11 billion dollars.

Europe was reported to be the worst affected region in the world for the aviation industry. The rest of the community around the world did not even come close to the losses suffered in Europe. In this latest quarter though, the equity in airlines has shot up to a reported 15 percent and a significant increase in profits was also noted.

The third quarter reports for majority of the airlines across the world have declared a combined profit of over 700 million dollars. In comparison, the same period last year in 2008 showed the same airlines had made losses of slightly over 3.4 billion dollars. European airlines have not adjusted well and the combined show of profits was declared to be 563 million dollars. In 2008, their combined earnings showed a profit of 1.2 billion dollars.

IATA is of the opinion that even though forecasts look bright, the struggling airline industry is a long way off from full recovery. Most airlines have shown only half of their peak earnings reported in 2007. In comparison with 2007, the airline industry will reportedly make a loss of around 1.2 billion dollars.

Airlines have been carrying out various cost-reducing measures to stay afloat. Capacity on routes was decreased and prices were hiked in order to reduce the short fall in lost revenue. Low-cost carriers like RyanAir and Easyjet, however, continued their expansions. Increased capacity on routes showed that travel was still desirable but only when the ticket prices were very low.