Airlines cut 2011 profit forecast to $4bn from $8.6bn
GLOBAL airlines cut their 2011 profit forecast by more than half to $4bn (€2.9bn) yesterday as high oil prices and turmoil in Japan, North Africa and the Middle East weigh on the industry's recovery.
The International Air Transport Association (IATA), which represents most global carriers, also warned of a looming trade war if Europe moves ahead with plans to force airlines to join an emissions trading scheme next year. China said it would support legal action.
Airlines say the scheme, designed to tackle growing emissions from the aviation industry, will only increase costs and add to pressures already caused by the sluggish global economy.
"The efficiency gains of the last decade and the strengthening global economic environment are balancing the high price of fuel," the IATA's director general, Giovanni Bisignani, told the group's AGM in Singapore. "But with a dismal 0.7pc margin, there is little buffer left against further shocks," he said.
The IATA $4bn profit forecast compares with an $8.6bn forecast on March 2, just before the Japanese earthquake and tsunami triggered a nuclear meltdown at a power station. Since then, the Arab uprisings have spread and oil prices have traded well above $100 a barrel.
The forecast would also mark a drop of more than 75pc from the industry's estimated 2010 profit, which was raised to $18bn from $16bn. (Reuters)