IATA: Doom and gloom for the airline industry

Ever wonder why New Orleans‘ airport is coded MSY or Toronto is YYZ? Those acronyms are assigned by the International Air Transport Association, or IATA. They’re also the group the assign airlines their two letter symbols: DL for Delta, WN for Southwest and so on.

In addition to their uncanny ability to assign and mediate airport and airline names acronyms, the IATA is also an industry watchdog and partner, ensuring that airlines calculate fares correctly, function in the bureaucracy and behave properly in times of strife. You can see how active their pressroom is here.

And how does one of the industry’s strongest players feel about the future of airlines? If you hadn’t guessed from the headline, they’re pretty somber. In an article released on Monday, the agency predicted severe losses for the industry in 2008, all as a result of higher crude prices. Earlier this year when similar calculations were made (at 86$/barrel), the upbeat news was a profit of near 4.5bn; now the loss is over 2 billion dollars.

The worst part? The 2bn loss is calculated at a crude price of $106.5. With oil trading at well over $130 these days, those losses are going to be significantly higher by year’s end. End result? More hardship for the airline industry.

Keep your receipts handy. This may be a rough summer.