Last year, I did a blog entry looking at how the world's airlines had been so badly hit by the global financial crisis and expected to lose $9 billion over the next 12 months. With the financial crisis, people simply stopped flying and found other ways to connect.

Now we have the International Air Transport Association reporting that demand for air travel has hit an all time low. Carriers in Asia Pacific, Europe and North America experienced declines in passenger demand of 5.6%, 5.0% and 5.6% respectively in 2009 with European carriers remaining 20% below their peak in 2008.

All this coincides with Japan Airlines this month declaring bankruptcy. JAL had liabilities exceeding Y2.32 trillion and Y780bn of interest-bearing debt it couldn't service. It was a zombie airline. The big question is whether other airlines will join JAL.

The International Air Transport Association declares the worst is over but we can't be certain of that. They're whistling in the grave yard. No one can rule out a double dip recession and if it happens again, we can expect more casualties.