Airlines ‘face £5bn in losses’

A collapse of efforts to shore up the euro and prevent a new shock to the global banking system would hit air transport worldwide and cripple the Asian profit machine, which has led the industry’s recovery since 2009, Geneva-based International Air Transport Association (IATA) said. Tony Tyler, the body’s director general, said: “The biggest risk facing airline profitabilityover the next year is the economic turmoil that would result from a failure of governments to resolve the eurozone sovereign debt crisis.

“Such an outcome could lead to losses of over $8bn, the largest since the 2008 financial crisis.”

IATA, which represents 240 airlines, cut its central forecast for industry profits to $3.5bn from $4.9bn.