IATA Cuts 2010 Airline Loss Forecast To $2.8 Billion Versus $5.6
Billion
LONDON -(Dow Jones)- The International Air Transport Association, or IATA,
Thursday said it expects the airline industry to incur a $2.8 billion loss in
2010, half the $5.6 billion previously expected.
IATA, which represents some 230 airlines and 93% of scheduled international
traffic, also lowered its 2009 loss estimate to $9.4 billion from the $11
billion it had previously slated for the year.
The improvement in forecasts has mainly been driven by economic recovery in
the emerging markets of Asia-Pacific and Latin America.
However, IATA said there was an emergence of a "two-speed industry" relating
to recovery performance.
"Asia and Latin America are driving the recovery. The weakest international
markets are North Atlantic and intra-Europe which have continuously contracted
since mid-2008," said Giovanni Bisignani, IATA's director general and chief
executive officer.
The aviation body said passenger demand is forecast to increase 5.6% in 2010
from 2009. It had previously expected passenger demand to rise 4.5%. Cargo is
now expected to rise 12% this year, higher than its previous 7% forecast.
Yields, or average fares, are expected to improve 2% in 2010 compared with
last year, while cargo yields are expected to rise 3.1%, IATA said, as carriers
match supply to demand. That will help boost revenue to $522 billion in 2010, a
$44 billion improvement on previous expectations for 2010.
"Revenues are half-way to recovery - $42 billion below the 2008 peak and $43
billion above the 2009 trough. Important fundamentals are moving in the right
direction," Bisignani said.
However, he warned risks still remain. "Oil is a wild card, over capacity is
still a danger, and costs must be kept under control - throughout the value
chain," including labor, said Bisignani.
IATA expects airlines' fuel bills to increase by $19 billion in 2010 to $132
billion as a result of both airlines increasing capacity and based on average
2010 oil prices rising to $79 per barrel, compared with the $62 per barrel
average price for 2009.
-By Kaveri Niththyananthan, Dow Jones Newswires; 4420 7842 9299;
kaveri.niththyananthan@dowjones.com
(END) Dow Jones Newswires
03-11-100418ET
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