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.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS