"Our last industry forecast made in December was for a USD$2.5 billion loss in 2009 based on a 3 percent fall in passenger demand and a 5 percent demand in cargo," said Giovanni Bisignani, Director General and CEO of the International Air Transport Association (IATA).
"This is now looking very optimistic and next week we will issue a revised forecast," he told reporters.
IATA, which represents 230 airlines said earlier this month world airlines lost up to USD$8 billion last year, far more than the USD$5 billion previously estimated.
In January, international passenger demand fell 5.6 percent year-on-year, following a 4.6 percent decline in December, according to IATA. February numbers are to be released next week.
Cargo volumes in January fell 23.2 percent year-on-year after December's 22.6 percent decline, the eighth consecutive month of contraction for freight traffic.
Bisignani said while economy travel demand has also slumped in response to the global financial crisis, a much faster decline in the premium segment, which airlines depend on for their bottom line, was hurting more.
"Business classes are empty. The airlines make money in the front and recover the cost on economy, and when the business class disappears, it's a big problem," he said.
Airlines around the world have been battered severely by the global financial crisis and have unveiled a slew of cost-cutting measures to stay afloat. Asian carriers have been worst hit.
Singapore Airlines, the world's biggest airline by market value, last week asked staff to take unpaid leave for up to two years in a bid to reduce costs.
The Singapore carrier, which last month announced plans to cut its capacity by 11 percent and has grounded 17 of its 100-plus aircraft, had already asked pilots at its cargo arm to volunteer for unpaid leave.
Cathay Pacific, the dominant airline of Hong Kong and Asia's fifth-largest carrier by market value, which reported a record USD$1 billion second-half loss recently, said last week it could sell some assets to raise cash.
Bisignani said he expected more capacity cuts by airlines across the world to adjust to slowing demand.
"You see further capacity cuts practically every week in different parts of the world. We have to try to adjust capacity to demand," he said.
(Reuters)
