Airline losses are forecast to exceed $5bn this year with the industry expected to remain heavily in loss in 2009, under pressure from high oil prices and a sharp slowdown in the rate of growth in demand for air travel.

Giovanni Bisignani, director-general of Iata, the global airline trade association, said yesterday year-on-year growth in passenger demand had fallen to only 1.9 per cent in July, the lowest level for five years.