Monday, June 08, 2009

Airline Industry to Face $9 billion Global Loss This Year

The economic recession has not got over yet and it seems that it will continue for an extended period now. I do not know about any other sector, but global airline industry is predicting so. Recently, The International Air Transport Association has almost doubled its estimated loss to $9 billion. The initial forecast indicated a bit better than last year’s losses, but now it seems that the condition is going be worst than the previous year. Global airline industry would see a 15% drop in its yearly revenue which is even worst than the condition after the terror attack in the US on 11 September 2001.

The airline business is currently stumbling due to the prevailing economic crisis which saw many airline companies to cut its flights, staffs, in-flight services as well as salaries to deal with the recession-hit condition. Some airlines are trying to attract the cost-sensitive travelers by offering tickets for much less. Demands for first class and business class tickets have been slowed down significantly, as many travelers are choosing economy class to save money.

Asia-Pacific region saw biggest loss last year mainly because of economic slowdown in Japan. Moreover, the booming growth in Indian and Chinese economy has also been halted by the current economic meltdown. Naturally, the middle class and upper middle class in China and India are now much more concerned about saving money. Overall, it seems that the condition of global airline industry is less likely to improve this year.

Related article:

NY Times