IATA says that profits will fall by 74% for Europe’s carriers
European airlines will see profits slide by 74% this year, if the International Air Transport Association’s gloomy forecasts are correct. Consumer demand continues to be weak while oil prices remain at high levels. Factors like these have cut IATA’s previously rosy forecast for profits for Europe’s carriers from $1.9 billion in 2010 to just $500 million this year.
Globally, the effect is just as drastic. IATA expects airline profits to fall from $18 billion in 2010 to just $4 billion this year. That’s less than half the association’s previous forecast for the industry, which appeared in March.
“The efficiency gains of the last decade and the strengthening global economic environment are balancing the high price of fuel. But with a dismal 0.7% margin, there is little buffer left against further shocks,” Giovanni Bisignani, IATA’s director general and chief executive, said.
[picture courtesy SAS]