The International Air Transport Association (IATA) is predicting heavy losses for the airline industry this year with the heaviest slumps coming for the Asian-Pacific, Latin America and European markets. The IATA represents close to 230 airlines, which comprise over 90 percent of airline traffic internationally.
The Asian-Pacific area is expected to lose close to $1.7 billion this year despite previous forecasts of only $1.1 billion. Most of the drop in traffic comes from the fact that between 5 and 10 percent less people are expected to travel to China this year. Japan is expected to see a drop of about 5.5 percent of their traffic.
Carriers that travel to Europe are expected to lose about $1 billion for 2009. This corresponds to close to a three percent drop in the continents overall GDP. Latin America is expected to be a mixed bag. The IATA is expecting that more people will travel to the area since the ticket prices tend to be cheaper than going overseas. The drop in the demand for commodity products, however, will ultimately lead to a nearly eight percent turn down in traffic.
Travel within North America is one of the few areas of the travel industry that is expected to at least break even with $100 million in profit. Much of this has to do with the cut in the number of seats and the lower cost of fuel. Delta plans to further severely reduce its international capacity while Continental also plans to do some cutbacks as well.
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