IATA cuts 2010 loss forecast in half

The International Air Transport Association (IATA) has reassessed its forecast for 2010, with expected losses halved to US$2.8 billion. Demand is now expected to grow by 5.6% in 2010, up from the previous forecast of 4.5%. International demand showed improvement in January compared to the previous year, up 6.4% (Travel Today, March 3). IATA also lowered its 2009 loss estimate to $US9.4b from the previous $US11bn loss. “Revenues are halfway to recovery - $US42bn below 2008 peak and $US43bn above 2009 the trough. Important fundamentals are moving in the right direction,” IATA chief executive Giovanni Bisignani said. Tighter supply and demand conditions are expected to result in improved yields, 2.0% for passenger and 3.1% for cargo. This is a marked improvement from the 14% fall experienced by both in 2009. “We can be optimistic but with due caution,” said Bisignani. “Oil is the wildcard, over capacity is still a danger, and costs must be kept under control - throughout the value chain and with labour.” The Asia Pacific region is expected to see a $US2.7bn loss in 2009 turn into a $US900m profit in 2010, on the back of a rapid recovery being driven mainly by the Chinese market. Demand in the region is also expected to grow substantially in 2010, by a predicted 12%. However, with improving economic conditions, the price of fuel is rising and is expected to hit US$79 per barrel, up from a previous forecast of $US75.