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IATA cuts North American profit outlook; US airline shares down

IATA cut its global industry profit outlook due to rising fuel prices. The forecast for the airline industry was cut back from USD9.1 billion to USD8.6 billion. Oil prices are forecast to increase from 26% to 29% of overall costs. North American airlines are forecast to make USD3.2 billion in 2011, down 32% from 2010. Shares in US carriers dropped in trading on Wednesday, with Delta Air Lines falling 4.3%.

Details of IATA’s revised profit forecast for 2011 are as follows:

  • Revenue: USD594 million, +7.6% year-on-year;
  • Costs: USD575 million, +9.7%;
    • Fuel: USD166 million, +19.4%;
  • Operating profit: 18.4 million, -32.8%;
  • Net profit: USD8.6 million, -46.3%;
  • Passenger numbers: 2570 million, +5.4%;
  • Passenger yield: +1.5%;
  • Cargo volume: 46.2 million tonnes, +6.0%;
  • Cargo yield: +1.9%.

AirTran reported the following traffic highlights in Feb-2011:

  • Passenger numbers: 1.7 million, +2.4% year-on-year;
  • Passenger load factor: 76.9%, +1.8 ppts.

Alaska Airlines reported the following traffic highlights in Feb-2011:

  • Passenger numbers:
    • Alaska Airlines: 1.3 million, +13.1% year-on-year;
    • Horizon Air: 512,000, +3.3%;
  • Passenger load factor:
    • Alaska Airlines: 81.5%, +1.7 ppts
    • Horizon Air: 76.7%, +4.5 ppts;
  • On-time performance:
    • Alaska Airlines: 82.1%, -4.1 ppts;
    • Horizon Air: 73.5%, -15.5 ppts.

Selected AAD daily share price movements (% change): 3-Mar-2011