Asia Pacific airlines will perform slightly better in 2011 than initially projected but it will be nowhere near the US$8 billion it made in 2010.
IATA expects airlines in the region to contribute US$2.5 billion or just slightly more than a third of revised overall industry profits for 2011.
Yesterday, IATA announced that it expects the air line industry to make US$6.9 billion and not US$4 billion in profit this year.
This represents a net margin of 1.2 per cent against the industry’s US$594 billion revenue.
The weakness of air cargo markets is dispropor tionately affecting airlines from Asia Pacific owing to the larger share of cargo in airline revenues.
Air freight has stopped growing since the start of the year.
IATA slashed its full-year volume growth projection from 5.5 per cent to 1.4 per cent this year.
The shocks from the Japanese earthquake and tsunami continue to affect supply chains and cargo markets (in which Asia Pacific carriers have the largest market share).
A strong rebound is expected late in the year con tinuing into 2012.
“Relatively stronger economic growth and some re bound in cargo will help Asia Pacific airlines to maintain their 2012 profits close to 2011 levels at US$2.3 billion. The rest of the industry will see declining profitability. And the worst hit is expected to be Europe where the economic crisis means the industry is only expected to return a combined profit of $300 million. A long slow struggle lies ahead,” IATA director general Tony Tyler said in a state ment.
IATA has projected that the industry will make US$4.9 billion in profits next year.
Debt-burdened Western economies look set for an extended period of weak economic growth or worse, IATA said.
“While developing economies look to be in much better shape, the prospects for industry growth are limited because many transport linkages are with developed nations. The fourth quarter of 2011 and the first half of 2012 may well see the weakest point for air transport markets,” it said in its statement yesterday.
BTimes
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