Airlines' profits to rise
June 3, 2013
The International Air Transport Association (IATA) on Monday said it expected the global airline industry to log a $12.7-billion (9.75-billion-euro) profit this year. This represents an upward revision of its March projection of earnings to the tune of $10.6 billion.
But IATA warned that profit margins for individual carriers would remain extremely low. "The day-to-day challenges of keeping revenues ahead of costs remains monumental," the association's CEO, Tony Tyler, said in a statement in Cape Town. "On average, airlines will earn about $4 per passenger carried - less than the cost of a sandwich in most places."
European airlines were expected to report profits of $1.6 billion, the IATA stated. While that figure would be twice as high as the one forecast in the March survey, carriers on the continent would have an earnings-before-interest-and-tax margin (Ebit margin) of just 1.3 percent, the second lowest by regions after Africa at 0.9 percent, IATA said.
Mixed economic signals
The report spoke of continuing woes in the 17-member eurozone where economic improvements had allegedly stalled again in recent months, also casting doubts on airlines' ability to defy the debt crisis.
IATA predicted the total number of passengers carried this year will reach 3.13 billion. It would be the first time in history that number has exceeded the three-billion mark. By contrast, the association forecast freight volumes to remain stagnant at 52.1 million tons, with no significant growth since 2010.
Macroeconomic factors were thought to have a positive impact on bottom-line profit this year, including slightly lower fuel prices due to increasing oil supply from North America.
hg/mz (AFP, Reuters, dpa)