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IATA revises industry earnings forecasts

15-Dec-2005

SYDNEY (Centre for Asia Pacific Aviation) - IATA revised its industry earnings forecasts, due to the recent reduction in fuel prices:

  • 2005: (USD6.0 billion loss), down from the USD7.2 billion loss predicted in Aug-05 and based on expectations of an average oil price in 2005 of USD54-55 per barrel;
  • 2006: (USD4.2 billion loss), based on moderating passenger traffic growth from 7.1% in 2005 to 4.5% in 2006;
  • 2007: USD6.0 billion profit, representing an operating margin of around 3%.

“There is now a case for qualified optimism about the industry's financial performance…Fuel prices remain a major risk, but now appear to be on a slow downward trend as global economic growth and demand for oil slows. Returns to airlines are slowly improving, but are far from allowing long-term financial sustainability”, Brian Pearce, Chief Economist, IATA.

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