The world's major airlines had combined losses of as much as $8 billion in 2008, far broader than the $5 billionpreviously predicted, as the industry downturn worsened late in the year, the International Air Transport Association, or IATA, said Monday.

Airlines incurred losses of $4 billion in the fourth quarter of last year alone as the global economic downturn caused passenger and cargo volumes to tumble, and as airlines lost money on hedges set up when fuel prices were at record highs in the first half of last year, the trade body said in its Airlines Financial Health Monitor.

'Unlike earlier in the year, airlines are now losing money at the operating level,' IATA said.

Even though jet-fuel prices have declined to about $50 a barrel from nearly $150 a barrel at the peak of the market last year, 'many airlines have part of their fuel bill partly locked, through hedging, into higher prices,' IATA said.

IATA, which represents about 230 airlines, comprising 93% of global scheduled air traffic, warned last week that the slump in traffic continued into January and hasn't ended yet. Passenger traffic declined 5.6% in January from a year earlier, compared with a 4.6% drop in December.

Meanwhile, cargo markets continued an 'alarming' slump, dropping 23% in January from a year earlier, a slightly steeper drop than recorded in December. IATA expects airlines' combined revenues to fall $35 billion to $500 billion in 2009, leading to a loss of $2.5 billion for the industry.

Steve McGrath

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