IATA Upgrades Global Airlines Profit Forecast

Categories: Industry News | News

Global airlines are expected to post a net profit of US$4.1 billion this year, an improvement from an estimate made three months ago, according to the International Air Transport Association.

The industry body, which represents some 240 global airlines, had previously estimated the industry to post a combined profit of US$3.0 billion this year, compared with US$8.4 billion posted in 2011.

Airline profits will improve further to US$7.5 billion in 2013, IATA said Monday.

Margins for carriers will remain weak at 0.6% in 2012 and 1.1% next year, IATA said.

IATA calculations are based at Brent crude oil average price of US$110 per barrel this year and US$105 billion in 2013.

“Even six years ago, generating a profit with (Brent crude) oil at US$110 a barrel would have been unthinkable. The industry has reshaped itself to cope by investing in new fleets, adopting more efficient processes, carefully managing capacity and consolidating,” Tony Tyler, IATA’s director general and chief executive.

Among regions, European carriers are expected to post the largest loss of any region at US$1.2 billion in 2012.

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