Record profits forecast for airline industry
Record profits forecast for airline industry GENEVA (AFP) - – Industry association IATA on Tuesday raised its forecast for airline earnings in 2010 to a record 15.1 billion dollars from 8.9 billion dollars as economic conditions improved.
Despite the better than expected performance this year, the International Air Transport Association predicted that airlines would face more turbulence in 2011 with profits dropping back to 9.1 billion dollars (6.8 billion euros).
"The recovery cycle will pause in 2011," said IATA Director General Giovanni Bisignani.
"Although the 9.1 billion dollars profit projection for 2011 is better than we had previously forecast, next year the industry will face tougher conditions than what we are experiencing today," he told reporters.
Fuel prices are expected to average 84 dollars per barrel next year, up from 79 dollars in 2010.
In addition, an ongoing debt crisis in Europe is expected to stifle growth in industrialised markets.
"A number of European economies are in very serious problems," said Brian Pearce, chief economist at IATA.
"We think there will be further (spending) cuts by governments which will further depress economic growth," he said.
"We're going to see slower economic growth in Europe. Clearly that's going to make it a more challenging environment to grow revenues."
Profits for the region's carriers are estimated at just 100 million dollars in 2011.
Growth is largely going to come from fast-growing Asia, which is to post more than half of 2010's airlines profit at 7.7 billion dollars.
Despite the better than expected performance this year, the International Air Transport Association predicted that airlines would face more turbulence in 2011 with profits dropping back to 9.1 billion dollars (6.8 billion euros).
"The recovery cycle will pause in 2011," said IATA Director General Giovanni Bisignani.
"Although the 9.1 billion dollars profit projection for 2011 is better than we had previously forecast, next year the industry will face tougher conditions than what we are experiencing today," he told reporters.
Fuel prices are expected to average 84 dollars per barrel next year, up from 79 dollars in 2010.
In addition, an ongoing debt crisis in Europe is expected to stifle growth in industrialised markets.
"A number of European economies are in very serious problems," said Brian Pearce, chief economist at IATA.
"We think there will be further (spending) cuts by governments which will further depress economic growth," he said.
"We're going to see slower economic growth in Europe. Clearly that's going to make it a more challenging environment to grow revenues."
Profits for the region's carriers are estimated at just 100 million dollars in 2011.
Growth is largely going to come from fast-growing Asia, which is to post more than half of 2010's airlines profit at 7.7 billion dollars.
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