8-Dec-2011 9:53 AM

IATA downgrades 2011 operating profit; 2012 to see divergence in performance by regions

IATA downgraded (07-Dec-2011) its operating profit forecast for the global airline industry from USD14.8 billion to USD13.2 billion in full-year 2011. The industry group also downgraded its operating profit forecast from USD13.0 billion to USD8.7 billion for full-year 2012 with “marked divergence of financial performance between regions”. Details include:

  • FY2011 forecast:
    • Revenue: USD596,000 million, +9.1% year-on-year;
      • Passenger: USD469,000 million, +10.4%;
      • Cargo: USD66,000 million, stable;
    • Costs: USD583,000 million, +11.1%;
      • Fuel: USD178,000 million, +28.1%;
    • Operating profit: USD13,200 million, -39.2%;
    • Net profit (loss): USD6900 million, -56.3%;
    • Scheduled passenger numbers: 2840 million, +5.9%;
    • Passenger load factor: 78.2%, -0.2 ppt;
    • Cargo volume: 45.5 million tonnes, -0.7%;
    • Passenger yield: +4.0%;
    • Cargo yield: stable;
  • FY2012 forecast:
    • Revenue: USD618,000 million, +3.7%;
      • Passenger: USD488,000 million, +4.1%;
      • Cargo: USD66,000 million, stable;
    • Costs: USD609,000 million, +4.5%;
      • Fuel: USD198,000 million, +11.2%;
    • Operating profit: USD8700 million, -34.1%;
    • Net profit: USD3500 million, -49.3%;
      • North America: USD1700 million, -15%;
      • Europe: (USD600 million), compared to a profit of USD1000 million in p-c-p;
      • Asia Pacific: USD2100 million, -36.4%;
      • Middle East: USD300 million, -25%;
      • Latin America: USD100 million, -50%;
      • Africa: (USD100 million), compared to breakeven results in p-c-p;
    • Scheduled passenger numbers: 2948 million, +3.8%;
    • Passenger load factor: 78.0%, -0.2 ppt;
    • Cargo volume: 45.4 million tonnes, -0.2%;
    • Passenger yield: stable;
    • Cargo yield: stable. [more – IATA Presentation] [more – IATA Press Release] [more – Tony Tyler speech]

IATA: “Our forecast for 2012 also shows a marked divergence of financial performance between regions. European airlines are likely to be hardest hit by recession in their home markets, and we now expect to see small losses in this region. Contrasting performances are shown by North American airlines, where capacity cuts are providing some protection to profitability, and in Asia where, in particular, we expect significant profits generated by high load factors on China’s expanding domestic market.” IATA statement. Source: IATA, 07-Dec-2011.

IATA: “Even our best case scenario for 2012 is for a net margin of just 0.6% on revenues of USD618 billion. But the industry is really moving at two speeds with highly taxed European carriers headed into the red,” Tony Tyler, director general and CEO. Source: IATA, 07-Dec-2011.

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