× Digital News Videos Health & Science Opinion Education Columnists Lifestyle Cartoons Moi Cabinets Kibaki Cabinets Arts & Culture Podcasts E-Paper Tributes Lifestyle & Entertainment Nairobian Entertainment Eve Woman TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS

Airline losses forecast doubles to Sh700b as recession bites harder

By | July 9th 2009

By John Oyuke

Global airlines will lose $9 billion (Sh702 billion) this year, double the level forecast in March as recession continues to batter the industry’s net earnings.

International Air Transport Association (Iata) has revised its airline financial forecast for the year to nearly double the March estimate of a $4.7 billion (Sh366 billion) loss, reflecting a rapidly deteriorating revenue environment.

The global airline trade association also revised its loss estimate for last year to $10.4 billion (Sh811 billion) from the previous estimate of $8.5 billion (Sh663 billion).

African carriers are expected to suffer losses of $500 million (Sh39 billion) this year as a result of loss of market share combined with the impact of the recession.

Iata’s Director General Giovanni Bisignani said airline losses in the first three months of the year have been severe than expected.

Revised forecast

Bisignani was speaking in his State of the Industry address to top leaders gathered for the 65th Iata Annual General Meeting and World Air Transport Summit in Kuala Lumpur, Malaysia. The revised forecast comes at a time when Kenya’s national carrier Kenya Airways reported an annual loss of Sh5.6 billion as its fuel-hedging loss ballooned to Sh8.9 billion for the fiscal year ending March 31.

This was the airline’s first losing fiscal year after thirteen years of profitability. The airline was listed at the Nairobi Stock Exchange in 1996.

While the Board of KQ recognised the loss after tax compared unfavourably with the prior year’s reported profits, it remained optimistic that the company’s performance would improve in the year to 31 March 2010.

Bisignani said there is no modern precedent for today’s economic meltdown, noting the ground had shifted and the industry has been shaken. "This is the most difficult situation that the industry has faced," he told the Kuala Lumpur Summit.

Share this story
Somali pirates hijack Turkish ship in rare ambush
Pirates hijacked a Turkish ship in the Gulf of Aden yesterday in an unusual attack because of rough seas at this time of year, a Kenyan maritime official said.
Restoring Nairobi’s iconic libraries
Book Bunk is turning public libraries into what they call ‘Palaces for The People' while introducing technology in every aspect.