The world’s airlines will book net profits of $2.5 billion in 2010, the International Air Transportation Association said, just three months after it forecast a $2.8 billion loss.
The $5.3 billion turn round since the group’s March forecast is driven by a faster-than-expected recovery in the global economy, IATA said in its latest market forecast today, June 7.
“The global economy is recovering from the depths of the financial crisis much more quickly than could have been anticipated. Airlines are benefiting from a strong traffic rebound that is pushing the industry into the black,” IATA Chief Executive Giovanni Bisignani said.
“We thought that it would take at least three years to recover the $81 billion [14.3 percent] drop in revenues in 2009. But the $62 billion top-line improvement this year puts us at about 75 percent on the way to pre-crisis levels,” he said.
IATA said cargo demand will increase 18.5 percent compared with a previously forecast 12 percent, and cargo yields will improve 4.5 percent up from 3.1 percent forecast in March.
Cargo traffic, which grew at an annualised rate of 26 percent in the first quarter, is outpacing passenger traffic, which is forecast to grow 7.1 percent in 2010 against a previous estimate of 5.6 percent.
IATA says global airline revenues will reach $545 billion in 2010, a $23 billion increase on its March forecast. This is up from the $483 billion in 2009 but still below the $564 billion booked in 2008.
Asia/Pacific airlines are expected to be the most profitable with earnings of $2.2 billion, more than double the previously forecast $900 million in March and a major improvement on a $2.7 billion loss in 2009.
North American carriers are forecast to turn a profit of $1.9 billion, against an earlier estimate of a $1.8 billion loss and a $2.7 billion loss in 2009.
Europe is the only region in the red, with its airlines set to lose $2.8 billion in 2010, a deterioration on the previously forecast $2.2 billion IATA attributed to the fact that its airlines accounted for 70 percent of the $1.8 billion loss in revenues as a result of the Icelandic volcanic ash crisis.
The eurozone’s economic problems and a series of strikes are also impacting European airlines.
European airlines lost a combine $4.3 billion in 2009.
--Contact Bruce Barnard at firstname.lastname@example.org.