Global airline sector to take three years to recover from economic recession: Giovanni Bisignani, CEO, IATA

According to a Bloomberg report, the global airline industry will take at least three years to recover from the economic recession which affected the travel demand. Giovanni Bisignani, CEO, International Air Transport Association (IATA) said that the airline industry globally lost USD 50 billion in the past ten years, with USD 11 billion in 2009 alone. Revenues declined by USD 80 billion last year.

Bisignani added that the global travel slump has pushed carriers including Singapore Airlines and British Airways into losses and forced Japan Airlines to file for bankruptcy. Traffic dropped 3.5 per cent last year, with declines exceeding five per cent in Europe, North America and the Asia-Pacific region.  The economic slump and credit crisis have cost carriers two and a half years of growth in passenger markets and three and a half years in freight, so that 2010 will be ‘another Spartan year’ of cost controls and capacity caps.

As per IATA, about 34 carriers have gone out of business since 2008. Passenger yield, or the average price a traveller pays to fly one kilometre, will remain ‘flat’ this year and increase only next year.