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More turbulence ahead as air travel looks to take off

The International Air Transport Association says November could see the first growth in passengers this year. But its head warns the news masks bigger problems for the industry.

If 2008 was a grim year for air travel, 2009 has been even worse. Worldwide, the number of people flying this year is expected to fall another 5 per cent.

Industry body IATA says since January, airlines have slashed fares by a FIFTH. But they will only make a profit by taking the hard option, and further cutting the number of flights on offer, according to CEO Giovanni Bisignani .

“The problem is not the number of passengers, the problem is the revenues. This industry will have a drop of $80 billion in revenues this year, total revenues are $500 billion. The yields are down over 20%.There's too much capacity. The airlines have been quite good in reshaping a bit, but not enough.”

Russia's flagship carrier has seen a 9% drop in clients in the nine months to September. Aeroflot chief Vasily Savelyev is concerned about the future.

“This autumn and winter will be tough. We won't fly 9.3 million people as in 2008, but we hope for more than 8 million this year.”

A divide is opening up between traditional airlines, which are bleeding money, and cut-price rivals. Cheap flight provider Easyjet on Tuesday announced pre-tax profit for the financial year of more than $90 milion.

The head of low-cost Ryanair, where first-half profit soared more than 80 per cent, compared this week's merger of British Airways and Iberia to "two drunks trying to prop each other up."