European concerns cloud airline profitability outlook for 2012

IATA has raised its projections for profitability in North America and Latin America while reducing the profits projected for airlines from Europe, Asia and the Middle East. The latest revision in IATA's financial forecast, released earlier this week as part of the association's annual general meeting in Beijing, reflects the growing concerns over a slowdown in Europe. The debt crisis in Europe is expected to weaken economic growth in the region, impacting predominately European carriers and, to a lesser extent, Middle Eastern and Asian carriers. While many carriers from the Americas also operate to Europe, this exposure is offset by the relative strength in market conditions back home.

North American carriers are now projected to post net profits of USD1.4 billion in 2012 and account for nearly half of the USD3 billion in global industry profits IATA expects for the year. In 2011, North American carriers only accounted for only 16% of the industry's global profits, or USD1.3 billion of the USD7.9 billion total. These figures exclude the bankruptcy reorganisation costs at American Airlines.