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IATA upgrades airline industry outlook to a profit in 2010, with the exception of Europe

8-Jun-2010 12:05 PM

IATA released (07-Jun-2010) its Jun-2010 airline industry outlook, upgrading its forecast for losses in 2010 from USD2.8 billion (made in Mar-2010) to a net profit of USD2.5 billion. IATA is forecasting a return to profit for the world’s airlines, with the exception of European airlines, which have suffered from weak regional economic growth and the airspace closures due to the volcanic ash disruptions in Iceland.

Forecast highlights:

  • Demand:
    • Passenger: Growth of 10.2% in 2010, compared to a 4.3 decline in 2009.
    • Cargo: Growth of 5.4% in 2010, compared to a 4.9% decline in 2009;
  • Yield:
    • Passenger: +4.5%, compared to a 14.5% decline in 2009;
    • Cargo: +4.5%, compared to a 14.5% decline in 2009;
  • Premium travel: It does look as though the downturn in premium travel was cyclical and not permanent, which is rebounding at an “exceptionally strong annualised pace” of over 20% in the first quarter and further gains in the second half of this year are still expected.

Regional forecast:

  • Asia Pacific: USD2.2 billion profit, compared to loss of USD2.7 billion loss in 2009. Demand expected to increase 16.2%.
  • North America: USD1.9 billion profit, compared to a loss of USD2.7 billion in 2009. Demand expected to increase 8.2%.
  • Latin America: USD900 million profit, compared to a profit of USD500 million in 2009. Demand expected to increase 13.9%.
  • Europe: USD2.8 billion loss, compared to a loss of USD4.3 billion in 2009. Demand expected to increase 2.9%.
  • Middle East: USD100 million profit, compared to a loss of USD600 million in 2009. Demand expected to increase 19.5%.
  • Africa: USD100 million profit, compared to a loss of USD100 million in 2009. Demand expected to increase 13.5%. [more]

IATA: “The USD2.5 billion profit comes with some important health warnings. First, this represents a net margin of just 0.5%, which is a long way from sustainable profitability. Second, a major part of the global industry is still posting big losses. A stagnating economy, strikes, natural disasters, and a currency crisis have left European carriers struggling with an anticipated USD2.8 billion loss,” Giovanni Bisignani, Director General & CEO. Source: IATA, 07-Jun-2010.