IATA predicts profit turnaround
By Juergen Baetz |
June 8, 2010, Tuesday
|
Print Edition
Print Edition
THE global airline industry is showing a remarkable turnaround and will swing back to profit in 2010 after several difficult years as growth in Asia and the United States offsets weaker demand in Europe, the major international air transport group said yesterday.
Profits are expected to reach US$2.5 billion, the International Air Transport Association said, a vast improvement from the US$2.8 billion total loss it predicted three months ago.
"The global economy is recovering from the depths of the financial crisis much more quickly than could have been anticipated," IATA Chief Executive Giovanni Bisignani told journalists in Berlin.
The industry saw revenues drop by US$80 billion or 15 percent in 2009 amid the crisis, and IATA initially believed three years or more would be needed to recover.
Bisignani now expects "a strong rebound of air traffic," he said. Passenger traffic is forecast to grow by 7 percent to a total of 2.4 billion passengers in 2010. The forecast for cargo growth was revised sharply upward, from 12 percent in March to 18.5 percent.
Europe, however, remained a striking weak spot with IATA anticipating a US$2.8 billion loss for airlines on the continent - worse than the US$2.2 billion previously predicted. Europe's feeble growth, strikes at some airlines, the eurozone debt crisis and the volcanic ash cloud that caused major disruption this spring are hampering the recovery, according to IATA.
IATA has estimated the total impact on airlines' revenue of the ash cloud at US$1.8 billion.
"Europe is lagging behind," Bisignani said.
North American carriers, which sharply cut capacity amid the crisis, are expected to earn US$1.9 billion in 2010 - a turnaround from the previously predicted loss of US$1.8 billion, and the US$2.7 billion that carriers lost last year. Asian airlines are expected to earn US$2.2 billion this year, powered by strong growth across the region.
The level of first and business class travelers is back to pre-recession levels, boosting airline profits, IATA said.
Profits are expected to reach US$2.5 billion, the International Air Transport Association said, a vast improvement from the US$2.8 billion total loss it predicted three months ago.
"The global economy is recovering from the depths of the financial crisis much more quickly than could have been anticipated," IATA Chief Executive Giovanni Bisignani told journalists in Berlin.
The industry saw revenues drop by US$80 billion or 15 percent in 2009 amid the crisis, and IATA initially believed three years or more would be needed to recover.
Bisignani now expects "a strong rebound of air traffic," he said. Passenger traffic is forecast to grow by 7 percent to a total of 2.4 billion passengers in 2010. The forecast for cargo growth was revised sharply upward, from 12 percent in March to 18.5 percent.
Europe, however, remained a striking weak spot with IATA anticipating a US$2.8 billion loss for airlines on the continent - worse than the US$2.2 billion previously predicted. Europe's feeble growth, strikes at some airlines, the eurozone debt crisis and the volcanic ash cloud that caused major disruption this spring are hampering the recovery, according to IATA.
IATA has estimated the total impact on airlines' revenue of the ash cloud at US$1.8 billion.
"Europe is lagging behind," Bisignani said.
North American carriers, which sharply cut capacity amid the crisis, are expected to earn US$1.9 billion in 2010 - a turnaround from the previously predicted loss of US$1.8 billion, and the US$2.7 billion that carriers lost last year. Asian airlines are expected to earn US$2.2 billion this year, powered by strong growth across the region.
The level of first and business class travelers is back to pre-recession levels, boosting airline profits, IATA said.
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