IATA cuts 2008 airline industry profit forecast again
07.04.08
The International Air Transport Association (IATA) has cut its industry profit expectations for 2008 for the second time in four months, amid surging oil prices and slowing economy. IATA lowered its 2008 profit outlook for the airline industry to $4.5 billion from its September 2007 forecast that called for $7.8 billion profit for this year.
The initial impact of the credit crunch saw the $7.8 billion forecast lowered to $5.0 billion in December 2007. The revised estimate of $4.5 billion is are based on global economic growth slowing to 2.6% and an average annualized oil price of $86 per barrel (Brent Crude).
Commenting on the revised guidance, Giovanni Bisignani, IATA's Director General and CEO, ‘We still expect a positive bottom line of US$4.5 billion, but it's turning out to be a very tough year. The broadening impact of the US credit crunch has brought buoyant consumer confidence to an abrupt end. Oil prices continue to rise. Demand is softening and after the 64% improvement in labour productivity and an 18% reduction in non-fuel unit cost attained since 2001, efficiency gains are much more difficult to achieve.’
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