Global airlines set to lose $5 bn in 2008: IATA

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: Global airlines look set to return total losses of $5.0 billion in 2008 and are heading for $2.5 billion of losses in 2009 as the economic crisis bites, the International Air Transport Association (IATA) said.

The 2008 figure was slightly less than the $5.2 billion loss that the industry body predicted in September, due mainly to a rapid decline in fuel prices, while the 2009 figure was lower than the $4.1 billion previously forecast.

But its 230 members, which represent 93 percent of scheduled international air traffic, still face a bumpy ride.

"The outlook is bleak. The chronic industry crisis will continue into 2009 with $2.5 billion in losses. We face the worst revenue environment in 50 years," said IATA Director General Giovanni Bisignani.

Passenger traffic is forecast to dip 3 percent next year, while cargo was predicted to be 5 percent lower and revenue 6 percent lower, according to the Geneva-based body.

Air cargo traffic, which makes up 35 percent of goods traded internationally and is a barometer of the global economy, is continuing its decline, he said.

The 7.9 percent decline in air cargo in October, the fifth consecutive month of increasingly severe drops, was a clear indication that "the worst is yet to come" for airlines and the slowing global economy, IATA said.

European member airlines are expected to post losses of $1 billion next year, ten times higher than in 2008, it said.

North American airlines are expected to be the only region making a profit in 2009, but only some $300 million, less than 1 percent of revenue, it said.

Oil prices have tumbled from a peak above $147 a barrel in July to around $44 as the economic downturn has slashed demand.

The oil price fall is not reflected more in the IATA figures because of hedging, according to IATA Chief Economist Brian Pearce.

Some of the benefits of lower spot prices for fuel were being delayed into 2010, as hedging means many airlines are locked into higher than spot prices, Pearce told reporters.

IATA's forecasts for 2009 were all based on an average price of $60 a barrel for oil.