The estimated $9bn is almost double the $4.7bn loss that Iata had forecast in March.
The group represents about 230 airlines that make up 93 per cent of scheduled international air traffic.
Iata also revised its loss estimate for 2008 to $10.4bn from its previous estimate of $8.5bn.
According to Bisignani, in the aftermath of the 2001 attacks, global airline revenues declined by seven per cent and it took three years for the industry to recover, despite a strong global economy.
"This time we face a 15 per cent drop - a loss of revenues of $80bn - in the middle of a global recession," he said.
"Our future depends on a drastic reshaping by partners, governments and industry."
The airline industry has been among the worst hit by the economic crisis, which struck in the third quarter of last year, as demand for air travel around the globe has plummeted.
The airline industry crisis has extended to jobs as well.
Samer Majali, the chairman of Iata, told Al Jazeera that currently about 30,000 jobs have been lost.
"There are projections all over the world on job losses, but definitely tens of thousands [of] job losses will happen, primarily in the industrialised economies - the ones that have been the hardest hit by the recession," he said.
Moody's, a ratings agency, said in a report that the effect of the recession on demand for travel will have more of an impact on airlines' revenue than the rising cost of fuel throughout this year and 2010.
However, Bisignani noted that despite a drop in oil prices, "the slightest glimmer of economic hope sends oil prices higher".
|Plummeting demand for travel has hit the airline industry hard [EPA]
"Greedy speculation must not hold the global economy hostage. Failure to act by governments would be irresponsible," he said.
Iata says the airline industry fuel bill is forecast to decline by $59bn to $106bn in 2009, accounting for 23 per cent of operating costs with an average price of oil currently at $56 a barrel.
By comparison, the 2008 fuel bill was $165bn, accounting for 31 per cent of costs at an average price of $99 a barrel.
The gloomy outlook however, has not seemed to effect profitability in Qatar's airline industry.
Akbar al-Baker, the chief executive of Qatar Airways, said the state-owned airline was expected to make a profit of at least $100m this financial year.
Al-Baker also said the airline, which has about $27bn worth of planes on order, wants deliveries to be speeded up.
Qatar has about 200 planes on order from US firm Boeing and European rival Airbus.