"This is the most difficult situation the industry has faced," Giovanni Bisignani, IATA's director general and CEO, told the aviation body's annual meeting in the Malaysian capital.
IATA had predicted in March that 2009 losses for the airline industry would total $4.7 billion. It has also revised its estimate of 2008 losses to $10.4 billion from $8.5 billion.
In an effort to ride out the crisis, made worse by the recent outbreak of the H1N1 flu virus, airlines have been looking to cut costs everywhere they can.
Japan Airlines, Asia's biggest carrier by revenues, said it planned to cut capacity on international routes by 10 percent in the 2010 fiscal year.
Cathay Pacific, Hong Kong's largest carrier, said it was looking to further delay deliveries of new planes as it had seen no signs of recovery in its business.
State-owned Air India was also considering delaying planes on order from Boeing. "We are looking at options including rescheduling," Air India Chairman Arvind Jadhav told reporters. "I don't have cash, what do you expect me to do?" Air India has over $8 billion worth of planes on order from Boeing, including 27 B787 Dreamliners.
Globally, about 4,000 aircraft are scheduled for delivery in the next three years, which is 17 percent of the current fleet, IATA's Bisignani said.
"Once again, aircraft ordered in good times are being delivered in recession. Finding customers to fill them will be a challenge," he said.
Fuel Costs
Another major problem was rising fuel costs, a problem it would be "irresponsible" of governments not to act on, Bisignani said.
"The risk that we have seen in recent weeks is that even the slightest glimmer of economic hope sends oil prices higher," he said. "Greedy speculation must not hold the global economy hostage."
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