21-Sep-2011 10:20 AM

IATA expects weaker 2012 earnings for airline industry

IATA upgraded (20-Sep-2011) its net profit forecast for the global airline industry from its previous forecast of USD4 billion to USD6.9 billion in full-year 2011. The industry group also forecast a net profit of USD4.9 billion for full year 2012 due to sluggish growth and weak profits. Details include:

  • FY2011 forecast:
    • Revenue: USD594,000 million, +8.7% year-on-year;
      • Passenger: USD464,000 million, +9.2%;
      • Cargo: USD67 million, +1.5%;
    • Costs: USD579,000 million, +10.4%;
      • Fuel: USD176,000 million, +26.6%;
    • Operating profit: USD14,800 million, -31.8%;
    • Net profit: USD6,900 million, -56.3%;
    • Scheduled passenger numbers: 2833 million, +5.7%;
    • Passenger load factor: 78.2%, -0.2 ppt;
    • Cargo volume: 46.4 million tonnes, +1.3%;
    • Passenger yield: +3.0%;
    • Cargo yield: stable;
  • FY2012 forecast:
    • Revenue: USD632,000 million, +6.4%;
      • Passenger: USD493,000 million, +6.3%;
      • Cargo: USD70,000 million, +4.5%;
    • Costs: USD620,000 million, +7.1%;
      • Fuel: USD201,000 million, +14.2%;
    • Operating profit: USD13,000 million, -12.2%;
    • Net profit: USD4,900 million, -29.0%;
      • North America: USD1200 million, -20%;
      • Europe: USD300 million, -78.6%;
      • Asia Pacific: USD2300 million, -8%;
      • Middle East: USD700 million, -12.5%;
      • Latin America: USD500 million, -16.7%;
      • Africa: (USD100 million), compared to breakeven in p-c-p;
    • Scheduled passenger numbers: 2957 million, +4.4%;
    • Cargo volume: 48.2 million tonnes, +3.9%;
    • Passenger yield: +1.7%;
    • Cargo yield: stable.
    • [more - CAPA Analysis] [more – IATA Presentation] [more – IATA Press Release] [more – Tony Tyler speech]

IATA: “For 2012 we see profitability falling back to USD4.9 billion. We could well see the market reaching its weakest point at the end of this year and extending into early next year. We expect yields to be flat for cargo which will mean no change since 2010. And passenger yields will grow by 1.7%, about half the 3.0% growth that we expect this year. So the story for 2012 basically is that we will see slower growth in traffic and passenger yields. Costs will increase marginally faster than revenues and we face a tough year that will deliver a USD4.9 billion profit and a 0.8% margin,” Tony Tyler, Director General and CEO. Source: IATA, 20-Sep-2011.

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