The Hindu Business Line : IATA revises forecasts

The International Air Transport Association (IATA) has revised its forecasts as it sees slower growth of the aviation sector in 2008, with the logistics market being the first to feel the impact of what may be a global liquidity crisis, according to Shipping Gazette quoting UK’s Transport Intelligence Agency. The growth for airfreight, it is estimated, might be around 4.3 per cent , down from the earlier estimate of 4.8 per cent. The combined profi t of IATA’s member lines too, it is estimated, will drop to around $five billion from the earlier estimate of $7.8 billion. While the high fuel price will certainly be a major contributing factor, the slackness in demand caused by liquidity crunch is not being ruled out. The falling demand may cool fuel prices but not below $78 per barrel, which will entail 30 per cent increase in operating cost, it was pointed out. The profitability in the airlines sector in recent years has also been due to robust demand across all markets. With the US economy not growing as expected, IATA sees demand dropping. The load factors will be hit but the compensating factor may be the arrivals of new types of more fuel-efficient aircraft in the coming years.

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