$3 Bn Loss Forecasted For Global Airlines

Paris -- Global airlines are expected to lose $ 3 billion in 2006. They won’t even be able to recover from $ 3.2 billion of losses in 2005 as they contend with rising fuel bills.

IATA had previously made a forecast of $ 2.2 billion of combined losses in 2006.

The figure for now remains below the loss of $ 3.2bn for last year, but IATA CE Giovanni Bisignani told the group’s annual meeting in Paris that uncertainty remained.

"Oil is the wild card. Prices are racing ahead of efficiency gains and robbing our profitability," he said in an annual speech on the state of the industry.

Fuel is expected to make up 26% of airlines’ average costs in 2006 compared with 22% the previous year.

Airlines need on average to fill 63.3% of their available capacity by weight in 2006 in order to make money. But they are only expected to manage 62.4% according to IATA.

"The industry fuel bill will top $ 112bn this year - bn more than 2005," said the International Air Transport Association, which represents 261 airlines handling 94% of the world’s scheduled air traffic.

Its CEO told member airlines that governments need to remove barriers which are holding back the sector’s efforts to be more efficient.

He appreciated IATA’s step to start with paper tickets by the end of next year but he mentioned that governments remained an obstacle in taking similar cost-saving steps in the air freight sector.