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Aviation on a ‘thin tight-rope’; airline profits to slump in 2011 as fuel costs rise

3-Mar-2011

The aviation industry is balancing on a “very thin tight-rope” and there is a “very little buffer for the industry to keep its balance as it absorbs shock”, IATA CEO Giovanni Bisignani stated as the association downgraded its profit forecast for 2011. He also noted the “structural weakness” of the “fragile” aviation industry, which has a historical profit margin of just 0.1%. [1830 words]

Unlock the following content in this report:

Subheadings:

  • Revenues, yields and traffic growth upgraded
  • Tightening supply and demand give scope for yield improvement
  • Demand remains robust; passenger and freight forecast raised
  • Load factors weaken but remain at near record
  • Oil is ‘biggest risk’ for industry
  • Oil price prediction raised from USD84 to USD96/barrel
  • Taxation another key risk
  • Asia Pacific to be most profitable region
  • Oil price key threat to profits but demand and yield show positive signs

Graphs and data:

  • Commercial airline profitability: 1995 to 2011F
  • IATA operating profit margin and net profit margin: 2003 to 2011F
  • IATA financial summary and forecast: 2001 to 2011F
  • Premium travel growth and business confidence: Jan-2006 to Jan-2011
  • IATA passenger numbers, passenger growth and world economic growth: 2001 to 2011F
  • IATA cargo volume, cargo growth and world economic growth: 2001 to 2011F
  • International air freight and passenger volumes (seasonally adjusted): 2005 to 2011
  • Load factors on international passenger and freight markets (seasonally adjusted): 2006 to 2011
  • Jet kerosene prices and average international return fares: 2006 to 2011F    
  •            
  • IATA EBIT margin and net profits: 2007 to 2011F
  • IATA 2011 profit forecast for 2011
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