ISTANBUL, June 2: IATA said on Monday its member airlines faced losses of $2.3 billion this year due to soaring fuel costs, dramatically reversing a forecast of profits nearly twice that figure.

“The industry is in crisis, perhaps the biggest crisis we have ever faced,” said IATA secretary general Giovanni Bisignani at the start of its general meeting in Istanbul.

The International Air Transport Association represents around 240 air carriers accounting for 94 per cent of world air travel.

In April, it forecast profits of $4.5 billion for the industry. But as oil prices soared above $135 a barrel, operating costs have rocketed forcing a radical revision.

After sustaining losses of around 40 billion dollars after the September 11 attacks in the United States in 2001, the airline industry has recovered in recent years, posting healthy profits of $5.6 billion last year.

“Our industry is like Sisyphus: after a long uphill journey a giant boulder of bad news is driving us back down,” Bisignani said.

He warned that losses this year could total $6.1 billion if oil stays around $135 a barrel. The figure of $2.3 billion was based on oil averaging $106.5 over the year.

The dire predictions came amid mounting evidence that some in the airline industry are already losing the struggle.

Last Friday, the British reduced-fare business-class airline Silverjet suspended operations and entered administration, leaving it on the brink of collapse, after running into serious funding problems.

“Twenty-four airlines went bust in the last six months,” Bisignani said, adding that ticket prices were set to rise “to reflect (the) cost structure.”

British Airways head Willie Walsh agreed, telling a discussion panel: “I expect that the fares will increase.”

Jean-Cyril Spinetta of Air France-KLM expected low-cost carriers to struggle but nonetheless survive, even if some have to bow out, especially in Europe.

“I’m not saying the low-cost model will disappear, but in Europe lots of low-cost (carriers) will disappear,” he said.—AFP