IATA forecasts on air traffic profitability for 2010 and 2011
Submitted by fabio.vio on December 15, 2010 - 15:08.
The International Air Transport Association (IATA), which represents 90 % of global market, has published the data concerning air passenger in the third quarter and revised positively its industry outlook for 2010“Our profit projections increased for both 2010 and 2011 based on an exceptionally strong third quarter performance. But despite higher profit projections, we still see the recovery pausing next year after a strong post-recession rebound. And the two-speed nature of the recovery is unchanged with European airlines continuing to underperform other regions,” said Giovanni Bisignani, IATA’s Director General and CEO.
Major drivers for the improved 2010 forecast are:
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Passenger traffic growth of 8.9% (compared to 7.7% previously forecast)
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Strong passenger yield growth of 7.3% (unchanged from the previous forecast)
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Revenue growth to $565 billion (an improvement of $5 billion on the previous forecast)
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An average annual oil price in line with previously projected $79 per barrel (Brent)
The recovery cycle will pause in 2011. Although the $9.1 billion profit projection for 2011 is better than previously forecasts.
All regions are following the global trend of reduced profitability in 2011 compared to 2010.
North American carriers will see a 2010 profit of $5.1 billion decrease to $3.2 billion in 2011.
Asia-Pacific carriers will post the largest profit in 2010 at $7.7 billion, decreasing to $4.6 billion in 2011. It remains the most profitable region of the world for airlines based on strong GDP growth (outside of Japan) of 6.6%, next year.
Middle East carriers are expected to see 2010 profits of $700 million shrink to $400 million in 2011. It will be the fastest growing region in both 2010 and 2011. But the pace of demand growth will halve from 21.5% in 2010 to 10.5% in 2011.
European carriers will be the industry laggard among the major regions with a $400 million profit in 2010 shrinking to $100 million in 2011.
Latin American carriers will see their $1.2 billion profit in 2010 cut to $700 million in 2011..
African carriers will see 2010 profits of $100 million move to break-even in 2011.
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