Airlines eye profit surge in business forecast u-turn
The global airline industry is set to make a profit of $2.5bn (£1.7bn) in 2010, according to forecasts from a key industry body.
The International Air Transport Association (Iata) upgraded its forecasts for the year based on assumptions that the economy is improving more quickly than anticipated.
The outlook, which comes despite the disruptions caused by the Icelandic volcanic ash cloud earlier this year, would represent the first profit for the industry since 2007.
“Today there is some cautious optimism,” said Iata director Giovanni Bisignani.
“Global traffic is back to pre-recession levels with load factors nearing 80% and the bottom line is improving.
“Asia-Pacific is powering the upturn with $2.2bn in profit. North American carriers will move into the black at $1.9bn. Latin American airlines will return $900m, the only region with two consecutive profitable years,” said Iata boss, Mr Bisignani.
“It is a reason to celebrate. But with a margin of 0.5%, it will be a modest party. And we face real downside risks.”
The Iata report revised down its 2010 forecast profits for European carriers to a loss of $2.8bn, from $2.2bn, citing both slow growth in passenger numbers and the effect of the volcanic ash disruptions.
The overall forecast marks a dramatic upturn from its previous view. In March, the airline association had predicted global losses for airline businesses of $2.8bn.
The no-fly zone caused by the Icelandic volcano's eruption had led to massive losses for airlines.