Mideast airlines set for turbulent 2009

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BLEAK FUTURE: Middle East airlines set to make $200 million losses in 2009. (Getty Images)

Middle East carriers are set for another turbulent year, with the local industry’s 2008 losses expected to double in 2009 amid the worst revenue environment for 50 years.

Aviation body IATA has predicted $2.5 billion losses next year for the global airline industry – the biggest drop in revenue since 1958.

The organisation also said Gulf carriers will report $200 million losses next year as the economic downturn and lower passenger demand take effect.

“The outlook is bleak,” said Giovanni Bisignani, IATA’s director general and CEO.

“The chronic industry crisis will continue into 2009 with US$2.5 billion in losses. We face the worst revenue environment in 50 years.”

Global passenger traffic is expected to decline 3 percent in 2009 following a 2 percent growth this year – the first drop in demand since 2001 – while yields will also fall 3 percent.

More positively, oil prices will average $60 per barrel, reducing the global industry’s bill by $32 billion in 2009.

Bisignani said IATA’s fuel campaign, launched to achieve carbon-neutral growth and zero C02 emissions, has reduced the global airline industry’s bill by $2.8 billion.

But despite the saving, Bisginani admitted the sector will struggle next year.

“The ferocity of the economic crisis has overshadowed these gains and airlines are struggling to match capacity with the expected 3 percent drop in passenger demand for 2009,” he said.

“The industry remains sick and it will take changes beyond the control of airlines to navigate back into profitable territory.”

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