updated 9/3/2008 10:44:26 AM ET 2008-09-03T14:44:26

The International Air Transport Association said Wednesday it predicts airlines will lose $5.2 billion this year as oil prices remain high and demand weakens, and suggests this weak financial performance will continue in 2009.

This compares with a June prediction of $2.3 billion to $6.1 billion in losses, indicating a great deal of uncertainty over oil prices. The June prediction was based on an average oil price of $106.50 per barrel to $122 per barrel. The current prediction reflects an expected average oil price of $113 per barrel.

"The situation remains bleak. The toxic combination of high oil prices and falling demand continues to poison the industry's profitability," said IATA Director General and Chief Executive Giovanni Bisignani.

The current prediction reflects an expected average oil price of $113 per barrel. IATA predicts airlines will spend $186 billion on jet fuel this year, $50 billion more than they did a year ago. Fuel will make up 36 percent of carriers' costs this year, IATA predicts. In 2007, fuel made up an average of 13 percent of airline operating costs.

For 2009, the group expects carrier losses to total $4.1 billion, reflecting an expected average oil price of $110 per barrel.

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