Airlines passengers around the globe will benefit from low ticket prices well into the next ten years, according to an industry body, as airlines continue to lose millions of dollars due to the recession and downturn in air travel.
Increasing oil prices, slowdown in demand and strong competition will see the worldwide airline industry post a loss of $27.8 billion (£16.9 billion) for 2008 and 2009 according to the International Air Travel Association (IATA).
IATA, which represents about 90 percent of the airline industry including major players such as British Airways and American Airlines, expects airfares to remain low until around 2013.
This year IATA expects airfares to fall by 12 percent. Ryanair, Europe’s largest budget carrier, has forecast a 20 percent drop in fares as it attempts to fill an expanding fleet.
IATA chief executive Giovanni Bisignani said that the industry would lose about $80 billion in revenue this year due to a drop in passenger numbers and a weak growth in fares. He predicted that the situation could be a long-term disaster, with a recovery not expected until at least 2013.
IATA said it expected the airline industry to lose $11 billion this year, up from a previous estimate of $9 billion, which will create a two-year loss of about $27.8 billion, while passenger numbers across the globe are expected to drop by 4 percent, with Europe taking the biggest tumble.
However, the worldwide travel industry is anticipated to lose $3.8bn in 2010 because of rising fuel costs — which account for up to a third of an carrier’s overheads — are predicted to combine with weak fare growth in holding down industry revenues.