Airline Industry could lose up to $5.6 Billion in 2010… Holy Hell, that’s a lot of money!

Low yields and rising costs are an ongoing disaster for global airlines, who have already lost $49 billion since 2000, according to the International Air Transport Association.  The industry group retained its estimate of $11 billion full year losses for this year.

As a guy who pays the bare minimum of rent in Chicago by living in an attic, I can’t even fathom that kind of money. Maybe someone much smarter than myself could explain to me how this is possible. I mean, normally if a business loses money, it goes out of business. How are the airlines staying in business when posting those kind of loses? As cheap as I am, I cut my loses and run if I lose so much as a dollar.

Passenger volume dipped by 4.1 per cent, from the already-low levels reached in 2008 when financial markets collapsed, and premium fares dropped the most.  Cargo traffic also took a beating, with a drop of 13 per cent.

IATA said it predicts passenger traffic to rebound in 2010 by 4.5 per cent, with nearly 2.3 billion travelling.

I suppose it’s good that the airline folks are being somewhat optimistic, as opposed to what I do when I lose any kind of money, which is cry in the fetal position and look at the homeless shelter as if I’m about to meet my brethren (I overreact sometimes), but I think I’ll quickly play Devil’s Advocate.

The Obama administration and state governments have been looking into high-speed trains, much like what China has been rocking out for a few years now. I know that if a high-speed train connected Chicago to my hometown of Cleveland, I would abuse it to no end, never using a flight again. I imagine others would, as well, especially those who aren’t so fond of being above clouds and can’t understand how something so heavy can stay afloat (me being one of those people, if you couldn’t tell).

I think the airline industry has quite a ways to go before the skies are clear (bad pun intended).

[via Fly]