Global airlines are likely to lose $9 billion this year, the International Air Transport Association said on Monday, nearly double its estimate of just three months ago, as rising fuel prices and weak demand create an unprecedented crisis for the industry.

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 Corp, 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 Co.

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.

Prices for jet fuel in Singapore have jumped almost 60 percent since bottoming out around $46 a barrel in March.

IATA estimates the industry fuel bill will decline by $59 billion to $106 billion in 2009, or 25 percent of costs. In 2008, the global fuel bill was $165 billion or 31 pct of costs.

Bisignani said the aviation industry's 2009 revenues would fall by $80 billion to $448 billion because of the global economic crisis.

At a dinner on Sunday attended by chief executives of the world's biggest airlines, dinner sponsor Airbus sales chief John Leahy took a poke at Bisignani's gloomy view on the industry, declaring that he is an optimist despite expectations that the group's airlines will cut orders sharply.

I am a realist. I don't see facts to support optimism, Bisignani said on Monday.

One note of optimism, however, came from Qatar Airways, which has about $27 billion worth of planes on order and wanted deliveries speeded up, its chief executive said.

Akbar al-Baker told reporters that the state-owned airline expected to make a profit of at least $100 million this financial year.

(Additional reporting by Christina Pantin, Neil Chatterjee, Sara Webb, Jean Yoon, Soo Ai Peng; Writing by Lincoln Feast; Editing by Dhara Ranasinghe)