Airlines to lose $2.3bn this year, says industry body

ISTANBUL, June 2, 2008 (AFP) – Air travel industry body IATA predicted Monday that airlines would lose 2.3 billion dollars this year dramatically reversing an earlier prediction of profits nearly twice this figure. “Oil skyrocketing above US 130 per barrel has brought us into uncharted territory. Add in the weakening global economy and this is yet another perfect storm.”

The industry made profits of 5.6 billion dollars in 2007, the first since 2000.

The International Air Transport Association, which represents companies accounting for 94 percent of world air travel, had forecast profits of 4.5 billion dollars (2.9 billion euros) in April but blamed rising fuel costs for the reversal.

“The situation has changed dramatically in recent weeks,” IATA secretary general Giovanni Bisignani said at the start of the organisation’s general meeting here.