IATA slash global airline profit forecast
06.06.11
The International Air Transport Association (IATA) has slashed its profit forecast for the airline sector as a result of a number of factors, including rising fuel costs. It expects global airline profits to be just $4bn in 2011, compared to $18bn in 2010. In March, it had forecast profits of $8.6bn for this year.
Giovanni Bisignani, IATA director general and CEO, said: ‘Natural disasters in Japan, unrest in the Middle East and North Africa, plus the sharp rise in oil prices have slashed our profit expectations to $4 billion this year.'
He said that overall capacity, which combines passenger and cargo capacity, is expected to expand 5.8% this year, which is above the 4.7% anticipated increase in demand.
Airlines in Asia-Pacific are expected to remain the most profitable in the sector. For European airlines, much of the profit forecast for this year is expected to be generated on more buoyant long-haul markets.
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