The cliche about the airline industry proved true once again in 2008, as the environment operated between nosebleed oil prices and strong demand and lower oil prices, but weak demand. All told, the industry lost $5 billion:
Reuters: 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 on Tuesday.
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 per cent 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.
In theory, there has to be a way for this industry to be profitable, but historical evidence would suggest otherwise.