Airlines group says global industry lost over $6 billion in first half, some signs of recovery
On Tuesday September 1, 2009, 9:22 am EDT
GENEVA (AP) -- Airline companies lost more than $6 billion during the first half of the year due to the economic crisis, even as fresh figures showed some signs of recovery in the passenger and freight business, an industry group said Tuesday.
A sample of more than 50 airlines found their losses declined to $2 billion in the second quarter from $4 billion in the first quarter, the International Air Transport Association said, noting that the April-June period is usually a strong one for the industry.
"Since the sample of airlines is incomplete, total industry losses in the first half of 2009 are likely to have been in excess of the reported $6 billion," IATA said.
The Geneva-based group, which represents 230 airlines worldwide, said seat occupancy in international markets stabilized in July -- the first time in over a year -- but added that airlines need to further cut capacity to meet demand.
Freight capacity also still exceeds demand despite an 8.1 percent capacity cut in July, IATA said.
"With excess capacity continuing through Q2 it was not surprising that freight rates were down more than 20 percent over the year," it said.
Overall, the industry outlook remains volatile, IATA said.
Airlines are still adding to their fleet because of long-term orders committed to before the downturn.
Figures show companies increased their aircraft numbers by a net of 487, or about 2 percent of their overall fleet."Replacement and expansion of the fleet has delivered significant fuel efficiency savings," IATA said.
The group noted that rising fuel prices are once again eating into airlines' cash reserves.
Airline shares have risen 7.4 percent since the start of the year, lagging behind overall market improvements of 23 percent.
"Nonetheless, stronger equity markets gave airlines an opportunity to raise more -- much needed -- cash," IATA said.
Airlines have raised $3 billion of equity and $12 billion from new debt issues since the start of the year, it said.