BEIJING, June 11 (Bernama) -- The global aviation industry profits for 2012
are expected to be US$3 billion, unchanged from the last update in March.
According to the International Air Transport Association (IATA), the
industry''s profitability outlook was affected as the Europe debt crisis deepens.
"The US$3.0 billion industry profit forecast has not changed. But almost
everything in the equation has.
"Demand has been better than expected, so far this year. And fuel prices are
now lower than previously anticipated, but that’s on the expectation of
economic weakness ahead," IATA Director-General and Chief Executive Officer
Tony Tyler said.
"The eurozone crisis is standing in the way of improved profitability and
we continue to face the prospect of a net profit margin of just 0.5 per cent,"
he told at a press conference after the 68th IATA''s Annual General Meeting.
This will be the second year of declining returns since airline profits
peaked in 2010 at US$15.8 billion with a net profit margin of 2.9 per cent.
In 2011, industry profits fell to US$7.9 billion for a 1.3 per cent net
profit margin.
"Although airlines face the common challenges of high fuel prices and
economic uncertainty, the regional picture is diverse.
"Carriers in the Americas are seeing improved prospects for 2012. The rest
of the world is seeing reduced profitability. For European carriers, the
business environment is deteriorating rapidly resulting in sizable losses,"
Tyler said.
According to the IATA, Asia-Pacific carriers are expected to make the
largest contribution to industry profits (US$2.0 billion), even with a US$0.3
billion downgrade from the previous outlook, due to the weak first quarter
performance.
This is less than half the US$4.9 billion profit that the region delivered
in 2011 and a quarter of the US$8.0 billion achieved in 2010.
Asian carriers make up about 40 per cent of the global air cargo business
and the weakness of this market in 2011 was the reason why there was a large
decline in the region’s profits.
"There has been no let-up in the volatility of the economic environment,"
Tyler said.
"A few months ago, an oil price crisis was the biggest risk. Now all eyes
are back on Europe. Markets are expecting the eurozone sovereign debt crisis to
intensify and economic damage to follow.
"But with little clarity on how European governments will manage the
situation beyond providing further liquidity, the risk of a major downward shift
in economic prospects is very real.
"The next months are critical and the implications are big," he said.
-- BERNAMA
NCY JR