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IATA cautions over outlook; airline industry in continued 'crisis' state

5-Oct-2011 11:15 AM

IATA director general and CEO Tony Tyler stated IATA's airline profitability forecast of USD28 billion in the three years through 2012 may be unsustainable amid over-capacity and increased regulatory costs (Bloomberg, 04-Oct-2011). Mr Tyler cautioned airlines will generate a net profit margin of only 0.8% in 2012, and this could increase further if economic growth slows to less than 2.4%. Mr Tyler also commented that profitability is also being further jeopardised by the EU ETS scheme, which Mr Tyler labelled as "misguided". [more - CAPA Analysis]

IATA: “The natural condition of the airline industry is crisis. Occasionally, we’ve had short periods where the conditions are quite benign and everything goes quite well, and the danger is to believe that’s normal – and that’s wrong. We’re assuming world economic growth will be just marginally down for next year. If we’re wrong with that then all bets are off," Tony Tyler, director general and CEO. Source: Bloomberg, 04-Oct-2011.