Airlines may post an US$8.9 billion global profit this year, more than triple an earlier forecast, as the economic recovery spurs travel and carriers avoid over-expansion, the International Air Transport Association (IATA) said.
Earnings will probably fall to US$5.3 billion next year because of concerns about the sustainability of growth and “razor thin” profit margins, IATA said in a statement yesterday.
“This year is as good as it gets,” IATA director-general Giovanni Bisignani told reporters in Singapore. “The real question in this forecast is how long we see the recovery lasting.”
The group doubled its Asia-Pacific profit target and raised expectations for North America as Cathay Pacific Airways Ltd and Delta Air Lines Inc fly more passengers and cargo following the end of the global recession that contributed to US$50 billion of industry-wide losses over the past decade. European carriers may be unprofitable this year as faltering consumer confidence damps demand, IATA said.
Global sales will climb to US$560 billion this year, US$15 billion more than previously forecast, said the trade group, which represents about 230 airlines worldwide. Revenue reached about US$564 billion in 2008, it said.
Passenger traffic, or the distance flown by paying passengers, will climb 11 percent this year, outpacing a 7 percent increase in capacity, IATA said.
“Disciplined capacity management” and rising demand is helping airlines fill a greater proportion of seats and allowing them to raise fares, Montreal-based IATA said.
Carriers worldwide filled 78 percent of seats in the first seven months, Bisignani said.
Passenger yields, a measure of average fares, are expected to rise 7.3 percent this year, compared with an earlier forecast of 4.5 percent, IATA said. They remain about 8 percent below the level reached in 2008, the group said.
Yields next year will be “flat,” Bisignani said.
Asia-Pacific airlines will likely make a US$5.2 billion profit this year, compared with an earlier forecast of US$2.2 billion, IATA said.
North American carriers will post a US$3.5 billion profit this year, compared with an earlier forecast of US$1.9 billion, IATA said. For Europe, the group pared its loss forecast to US$1.3 billion from US$2.8 billion.
Oil prices will average US$79 a barrel this year, IATA said. Fuel expenditure, which accounts for about 25 percent of the industry’s costs, will total US$137 billion this year, it estimated.
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