The International Air Transport Association (IATA) says the aviation industry is in crisis.

“To say that there are challenges is an understatement. Our future depends on fundamental changes to the way that we do business and the regulatory structure of the industry, says Giovanni Bisignani, IATA’s director general and CEO during a recent speech in Montreal.

Since 2001, airlines have lost $53 billion. That includes losses of $16.8 billion in 2008, the biggest in history and $11 billion this year. IATA is forecasting a further $3.8 billion loss next year.

What happens to the fuel price impacts the business, he stated. In 2001-2002, oil was at $25 per barrel and fuel was 13 percent of costs. In 2008, oil averaged $99 per barrel and it was 32 percent of costs. This year IATA expects a price of about $61 per barrel. “The conclusion is oil price is volatile and we can expect the unexpected,” he said.

Meanwhile, IATA expects a four percent fall in passenger traffic. “There is a similar profile for cargo, which is a leading economic indicator. In this current cycle cargo traffic hit bottom a year ago with a 25 percent decline last December. This told us that the global economy was in serious trouble. It has recovered some ground but it is still about 18 percent below early 2008 levels. This indicates that this recession is far from over,” Bisignani stated.

‘Today’s economic crisis will not, however, change the long-term growth pattern. We hit economic speed bumps from time to time, some bigger than others. But eventually we will return to a growth path that is normally twice the speed of GDP expansion even if all regions will not grow at the same pace. North America and Europe may be reaching maturity but we can expect fast growth in China and India,” he believes.

The challenges and opportunities in the year ahead for the commercial aviation and military sectors is the subject of an upcoming Aviation Today webinar set for Dec. 10, 2:00 p.m. – 3:00 p.m. (ET)

The Teal Group's Richard Aboulafia and G2 Solutions' Michel Merluzeau will focus on both the commercial and military sectors of aviationo provide practical, actionable advice on how to boost a company's bottom line in the turbulent year ahead.

This timely webinar brings together two well-regarded analysts who will examine the major events of the past year and, from this examination, draw lessons that shed light on 2010. This webinar also is interactive: registrants can pose questions to the speakers for discussion in real time.

Topics planned for discussion include:

What are the latest trends in the fierce competition between Boeing and Airbus? Which airframer has the upper hand for 2010? Are smaller OEMs posing a serious challenge to these two behemoths?

As the global recession shows signs of easing, are Brazil, Russia, India, and China back on the upswing? As these regions heat up again, what are the ramifications for aviation OEMs, suppliers, and sub-contractors?

During the recent downturn in the commercial sector, aviation was buoyed by consistently strong defense outlays. Will defense spending slow down in 2010, putting the brakes on both military and commercial aviation? Or will defense's winning streak continue?

What are the expected spending trends for homeland defense? Which companies stand to gain the most?

How will the Obama administration's recent defense "reforms" affect aviation?

What's on the horizon, in the form of new avionics, maintenance procedures, engine capabilities, etc.? What will happen with the global airspace, as initiatives such as NextGen come closer to fruition?

Will the price of fuel remain a problem in 2010? How are aviation companies planning to cope with fuel costs?

…and much more!

To register, click on:

video.webcasts.com/events/pmny001/viewer/index.jsp


Ramon Lopez also serves as editor-in-chief of Air Safety Week; he has been covering air safety for more than three decades (rlopez@accessintel.com).