By Emma Ross-Thomas ISTANBUL (Reuters) - The International Air Transport Association (IATA) said on Monday a significant decline in global airline profitability, or even losses, look inevitable for 2008 as the industry struggles with sky-high fuel prices. "The situation is desperate and potentially more destructive than our recent battles with all the horsemen of the apocalypse combined," IATA Director General Giovanni Bisignani said in a speech at an annual meeting held this year in Istanbul. IATA said a combination of high fuel prices, a U.S. economic downturn and accelerated deliveries of aircraft ordered at the peak of the economic cycle but delivered during a slowdown meant the outlook for 2008 was "clouded by the perfect storm". "Adding to the downward pressures on revenue growth from the U.S. recession will be the acceleration in aircraft deliveries in 2008 and 2009," IATA said in its annual report. Record oil prices, which hit an all-time high of $135.09 a barrel on May 22, are seriously threatening the outlook for industry. Oil prices have roughly doubled in the past year. U.S. airlines are already suffering the most because of the downturn in the world's biggest economy. U.S. carriers have raised fares, added new fees and surcharges, cut jobs and reduced services to cope with oil prices and the slowdown. KLM Chief Executive Peter Hartman said demand will be hit by the oil price and economic slowdown, but so will supply be reduced as airlines go under. "You will also see a lower supply because more and more airlines get in the red and in trouble, and of course everybody who has an increase in costs as far as he cannot manage it under productivity improvements, should increase the prices for the consumer," he said. Also speaking on the sidelines of the conference, British Airways Chief Executive Willie Walsh said the company expected to trim its capacity later this year faced with soaring oil prices. LOSSES SEEN IN 2008 Bisignani forecast industry losses of $2.3 billion in 2008 if the average price of a barrel of Brent oil remained at $107 for the rest of the year. He also said that if oil prices remained at $135 a barrel for the rest of the year airline industry losses would be $6.1 billion. "If the consensus of experts is correct and oil averages $107 per barrel (Brent) the fuel bills will be $176 billion, $40 billion more than in 2007. This would push us back into the red with a loss of $2.3 billion in 2008," Bisignani said. He said last year's bottom line was $5.6 billion. Bisignani said traffic growth in the industry would at best be 3.9 percent this year, down from growth of 5.9 percent in 2007. The association said increased liberalisation in the industry would also intensify competition and squeeze profitability. Bisignani said 24 airlines had stopped operating or gone bankrupt in the last six months. He gave no further details. IATA represents 240 airlines operating 94 percent of all international passenger and cargo flights. | 
