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The American exception is based on the fact that carriers in this region were hardest hit by high fuel prices with very limited hedging and recorded the largest industry losses for 2008. An early 10% domestic capacity reduction in response to the fuel crisis has given the American carriers a head-start in combating the recession-led fall in demand. The lack of hedging is now allowing the region’s carriers to take full advantage of rapidly declining spot fuel prices. As a result, North American carriers are expected to post a small profit of 300 million Dollars in 2009. “North America will be the only region in the black, but the expected 300 million Dollars profit is less than 1% of their revenue. 2009 will be another tough year for everyone,” said Giovanni Bisignani, IATA’s Director General.
Despite the small profit in the largest regional market, IATA forecasts a 3% global decline in passenger traffic, while cargo traffic is expected to go down by 5%. According to IATA, it will take changes beyond the control of airlines to navigate back into profitable territory.
