The International Air Transport Association (IATA) has predicted that the world’s scheduled airlines could lose as much as US$9 billion in 2009 – nearly twice the level of losses it forecast just three months ago – and has revised its 2008 loss estimate upwards to $10.4 billion from the previous estimate of $8.5 billion.

In his ‘State of the Industry’ address to 500 of the industry’s top leaders gathered in Kuala Lumpur for the 65th IATA AGM and World Air Transport Summit, IATA director general Giovanni Bisignani told members that the “economic meltdown” was taking a heavy toll on the industry.

“There is no modern precedent for today’s economic meltdown. The ground has shifted. Our industry has been shaken. This is the most difficult situation that the industry has faced.

“After September 11, revenues fell by seven per cent. It took three years to recover lost ground, even on the back of a strong economy. This time we face a 15 per cent drop – a loss of revenues of $80 billion – in the middle of a global recession. Our future depends on a drastic reshaping by partners, governments and industry. We cannot bear the cost of government micro-regulation, crazy taxation and partners abusing their monopoly power,” said Bisignani.

Air cargo demand is expected to decline by 17 per cent in 2009 with carriers forecast to carry 33.3 million tonnes of freight, compared to 40.1 million tonnes in 2008. Passenger demand is expected to contract by eight per cent to 2.06 billion travelers compared to 2.24 billion in 2008. The revenue impact of falling demand will be further exaggerated by large declines in yields – down 11 per cent for cargo and seven per cent for passengers.

Bisignani also noted the creeping rise in oil prices saying: “The risk that we have seen in recent weeks is that even the slightest glimmer of economic hope sends oil prices higher. Greedy speculation must not hold the global economy hostage. Failure to act by governments would be irresponsible,” he warned.

Bisignani also urged governments to avoid protectionist policies as they stimulate economies: “The forces of de-globalisation are gathering strength. World trade is already suffering with a 15 per cent downturn. Protectionism is the enemy of global prosperity.

“In the 1930s, it prolonged the recession. And it will not work today. To build a strong global economy, we must fight hard to keep the world trading,”said Bisignani.