The world’s airlines would achieve carbon-neutral growth by 2020, global industry body International Air Transport Association (Iata) CEO Giovanni Bisignani said on Monday.

“Demand will continue to increase, but any expansion of our carbon footprint will be compensated,” he said in a copy of a speech delivered at the World Air Transport Summit, in Malaysia.

In 2007, Iata had announced a vision to achieve carbon-neutral growth, which would be followed by a steady reduction in overall emissions.

The airline industry’s carbon emissions would fall by 7% this year, of which 5% could be attributed to reduced capacity as a result of the recession, and 2% as a result of its climate-change strategy.

Bisignani called on the International Civil Aviation Organisation to define binding carbon-emission standards for manufacturers, on fuel companies to supply eco-friendly fuels and on governments to give the industry access to global carbon markets.

He said that biofuels had the potential to reduce the industry’s carbon footprint by 80%. Iata had already set a target of 10% alternative fuels by 2017.

Airlines would improve fuel efficiency by 1,5% by each year until 2020.

Meanwhile, Bisignani painted a gloomy outlook for airlines, saying that the industry would make a loss of $9-billion this year, with revenue of $80-billlion expected to disappear, owing to falling demand, broken consumer confidence and pandemic fear.

This was more than double than the $4,7-billion loss Iata had forecast in March, and more than three times the $2,5-billion loss it had initially expected for 2009.

In 2008, the global airline industry recorded a loss of $10,4-billion, as suffered from high oil prices the first half of the year, followed by a global recession in the second half.

The industry’s fuel bill was expected to fall by $59-billion to $106-billion, from $165-billion in 2008, Bisignani said, but warned that rising oil prices in anticipating recovery were a great risk.

The price of oil has dropped significantly since the record $147,27 a barrel that it reached in July last year, falling to about $30 a barrel by year-end. The oil price has been trading around $40 a barrel in 2009, but has spiked last week, hitting a seven-month high of $70 a barrel.

“Greedy speculation must not hold the global economy hostage,” Bisignani said.

He said that cargo traffic, which plunged by 23% in December showing the global economy was collapsing, had remained stable for about five months, indicating that this might be the bottom.

“Optimists see growth by the end of the year, but pessimists view this as a mirage and expect an L-shaped recovery. I am a realist, I don’t see facts to support optimism.”

Bisignani pointed out that banks were still not able to finance business and that $1-trillion was still needed to recapitalise.

“Our customers don’t have confidence. They need to reduce debt and that means less cash to spend. Business habits are changing and corporate travel budgets have been slashed. Video conferencing is now a strong competitor,” he told the meeting.

Bisignani called on airlines, partners and governments to build a stronger industry by ensuring that globalisation was protected and that the industry became safer, greener and profitable.

“The forces of deglobalisation are gathering strength and governments taking protectionist decisions. World trade is already suffering with a 15% downturn, depressing economies everywhere.”

He added about 4 000 aircraft ordered in good times would be delivered over the next three years, which is about 17% of the current industry fleet.

“Finding customers to fill them profitably will be a challenge.”

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