But signs of recovery found
The airline industry reported net losses of $3.3bn (€2.3bn) in the first quarter despite lower oil prices and a stock market recovery, the International Air Travel Association (IATA) said.
IATA's latest financial monitor for May showed that financial results for around 50 member airlines "continue to deteriorate".
"Fuel costs have fallen substantially since last year but clearly the collapse in revenues, due to recession, is having a larger impact on financial performance," IATA said in its report.
Despite the poor results, IATA found that capacity, demand and load factors had all shown signs of recovery in April. But the Association said it was unclear "how sustainable the rebound will be."
The Association also reported an 8% rise in airline share values in May, a sign that market confidence in a recovery is growing. IATA said despite the improved share price, airlines are only worth around half as much as in 2007.
The anticipated economic recovery may be driving oil prices back up, IATA said. The price of crude oil has risen by $15 a barrel so far this year to $55, despite "weak oil market fundamentals."
IATA said the rise in passenger volumes in April had failed to result in improved revenues, suggesting growth had come at the expense of yields.
Many airlines have announced capacity cuts in efforts to maintain load factors in the face of falling demand. But IATA said capacity cuts appeared to be slowing, down 2.5% in April compared to 4.4% the month before.
"The published schedules do not suggest any future acceleration in the resizing of the industry in the face of the recession," IATA added.
Association ceo Giovanni Bisignani yesterday said airline losses could be "substantially worse" than previous predictions.
Speaking in Kuala Lumpur, Mr Bisignani said IATA's latest industry forecast, due out June 8, will forecast losses exceeding the $4.7bn previously predicted.
www.iata.org [1]