24-Sep-2013 11:03 AM
IATA cuts USD1.5bn from Asia-Pacific profit forecast, sees stronger performance in North America
IATA released (23-Sep-2013) the following revised regional profitability and passenger/capacity growth outlooks for 2013:
- North America: USD4.9 billion profit, up from the previously forecast USD4.4 billion. Regional EBIT margin of 4.3%. 2012 profit was USD2.3 billion. Along with an improved overall economic outlook, the North American industry's improved profitability is being driven by the impact of a better industry structure. Consolidation and international JVs on major markets are driving efficiency gains. Passenger demand growth of 2%, the slowest of any region. Capacity growth forecast of 1.6%. IATA expressed concerns over the trend towards more onerous regulation in the US, including "unfounded objections to further consolidation" by the US Department of Justice;
- Europe: USD1.7 billion profit, up from the previously expected USD1.6 billion and the USD400 million profit that European carriers made in 2012. 2013 EBIT margin forecast at 1.3%, the weakest among the major regions and well below the industry average of 3.2%. 4% expansion of passenger demand. 2.8% increase in capacity. Slowly improving performance is largely being driven by long-haul markets and economic stabilization in the Eurozone. Stronger performance seen in the Germany and UK markets. Larger airline groups and airlines with well-developed long-haul operations are performing better than smaller carriers largely dependent on intra-European travel;
- Asia-Pacific: Profit outlook cut by USD1.5 billion to USD3.1 billion profits, largely driven by slower growth among emerging economies. Asia-Pacific carriers the most impacted by flat cargo performance. Somewhat offset by a strengthening domestic market in China. Japanese carriers are also seeing a boost from economic activity. Passenger demand growth of 6.6%. Capacity forecast at 6.9% increase;
- Latin America: Profit outlook unchanged at USD600 million. Economic weakness in Brazil is offset by performance improvements due to restructuring and capacity discipline. The long-haul market between North and South America continues to grow. Passenger demand growth of 6.0% is expected to outstrip capacity expansion of 5.3%;
- Middle East: Profit forecast raised from USD1.5 billion to USD1.6 billion. The region's hubs continue to support strong performance on long-haul markets. Impact of the Syrian crisis has been limited. Passenger demand expected to grow by 10.5%, the strongest among all regions. Capacity growth of 11.3% forecast;
- Africa: Forecast of USD100 million loss, reversed from the previously projected profit of USD100 million. Long-haul markets face stiff competition, while intra-Africa market development remains constrained by a restrictive regulatory environment. Demand growth is expected to be a "robust" 7.8% ahead of a capacity expansion of just 5.5%. [more - original PR]