Global airlines are expected to post a combined loss of 5.2 billion dollars in 2008 on a "toxic" combination of high oil prices and falling demand, industry association IATA warned Wednesday.
The latest projection marked a cut from an August estimate of a 6.1 billion dollar loss on spiking oil prices, but IATA Director General Giovanni Bisignani said that the situation "remains bleak."
"The toxic combination of high oil prices and falling demand continues to poison the industry's profitability," he said.
The group's latest projections assume an average crude oil price of 113 dollars per barrel, and 140 dollars for jet fuel.
The crude price is 40 dollars more than the 73 dollars per barrel average for 2007, pushing the industry fuel bill to a predicted 186 billion dollars for the whole year, Bisignani said.
North American carriers are set to be the hardest hit with expected losses of five billion dollars in 2008, IATA said.
European airlines are still seen in the black but only just, as profits tumble to 300 million dollars from 2.1 billion dollars in 2007. Similarly, Asia-Pacific carriers are expected to see profits shrink to 300 million dollars from 900 million.
IATA also said that passenger demand growth fell to 1.9 percent in July, its lowest level in five years.
Asia-Pacific demand fell by 0.5 percent, "showing that economic weakness is spreading to previously robust economies."