The International Air Transport Association (IATA) has warned it expects 2012 to be a tougher year for the airline industry, with slim profits and tighter margins ahead.
Director General and CEO Tony Tyler admitted: “It looks like we are headed for another year in the doldrums.
“With business confidence declining, it is difficult to see any potential for significant profitable growth.”
Tyler said that, despite high oil prices and economic uncertainty, “airlines are going to make a little more money in 2011 than we thought”, but added: “However, given the weak global economies, it won’t be much.
“While airline profits may rise from the US$4 billion projected in June to $6.9 billion, we should keep the improvement in perspective.
“The $2.9 billion bottom-line improvement is equal to about a half a percent of revenue. And the margin is a paltry 1.2%.
“Airlines are competing in a very tough environment.”
IATA emphasised that despite the improvements, profitability was still exceptionally weak, considering the industry’s total revenues of $594 billion.
It said air freight had stagnated since the start of this year and had slashed its full-year volume growth projection from 5.5% to 1.4%.
Airlines are expected to carry 46.4 million tonnes of cargo in 2011, down from the previous forecast of 48.2 million. Air cargo volumes reached their post-recession peak in May 2010, largely driven by re-stocking. This July, traffic was 4% lower than that level, said IATA.
Director General and CEO Tony Tyler admitted: “It looks like we are headed for another year in the doldrums.
“With business confidence declining, it is difficult to see any potential for significant profitable growth.”
Tyler said that, despite high oil prices and economic uncertainty, “airlines are going to make a little more money in 2011 than we thought”, but added: “However, given the weak global economies, it won’t be much.
“While airline profits may rise from the US$4 billion projected in June to $6.9 billion, we should keep the improvement in perspective.
“The $2.9 billion bottom-line improvement is equal to about a half a percent of revenue. And the margin is a paltry 1.2%.
“Airlines are competing in a very tough environment.”
IATA emphasised that despite the improvements, profitability was still exceptionally weak, considering the industry’s total revenues of $594 billion.
It said air freight had stagnated since the start of this year and had slashed its full-year volume growth projection from 5.5% to 1.4%.
Airlines are expected to carry 46.4 million tonnes of cargo in 2011, down from the previous forecast of 48.2 million. Air cargo volumes reached their post-recession peak in May 2010, largely driven by re-stocking. This July, traffic was 4% lower than that level, said IATA.
Source: IFW
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